Repayment Threshold 2016/17

edited 30 November -1 at 1:00AM in Student Money Saving
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Ed-1Ed-1 Forumite
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edited 30 November -1 at 1:00AM in Student Money Saving
With RPI for March in at 0.9%, the repayment threshold (for plan 1 loans) will rise to £17495 from April 2016 (17335x1.009 rounded up). Monthly threshold will be £1457 and weekly threshold will be £336.

From 1st September 2015:

Interest rates for plan 1 loans will be 0.9%.

Interest rates for plan 2 loans will be 0.9% or 3.9% depending on whether you are studying or not.

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  • silvercarsilvercar Forumite, Board Guide
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    Ed-1 wrote: »
    From 1st September 2015:

    Interest rates for plan 2 loans will be 0.9% or 3.9% depending on whether you are studying or not.

    Don't think that is quite right. See here:

    http://www.slc.co.uk/services/interest-rates.aspx


    If you graduate Summer 2015 the interest rate will be 3.9% until April 2016.
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  • Ed-1Ed-1 Forumite
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    silvercar wrote: »
    Don't think that is quite right. See here:

    http://www.slc.co.uk/services/interest-rates.aspx


    If you graduate Summer 2015 the interest rate will be 3.9% until April 2016.

    Yeah - technically by 'still studying' I mean 'until the April after you finish'.
  • LokoloLokolo Forumite
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    Ed-1 wrote: »
    With RPI for March in at 0.9%, the repayment threshold (for plan 1 loans) will rise to £17495 from April 2016 (17335x1.009 rounded up). Monthly threshold will be £1457 and weekly threshold will be £336.

    From 1st September 2015:

    Interest rates for plan 1 loans will be 0.9%.

    Interest rates for plan 2 loans will be 0.9% or 3.9% depending on whether you are studying or not.

    Thanks for the good news! A student loan rate of 0.9% and a mortgage rate of 1.5%! Cheap cheap cheap.
  • silvercarsilvercar Forumite, Board Guide
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    I wonder on the logic of having an interest rate much higher while you are studying until 8 months later, then having a lower interest rate from then on.
    Usually found at a vaccine centre 💉
    I'm a Board Guide on the Debate House Prices & the Economy, House Buying, Renting & Selling, Mortgages and Endowments, In My Home incl DIY, Overseas Holidays & Student boards.
    I volunteer to help get your forum questions answered and keep the forum running smoothly.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to [email protected]. Any views are mine and not the official line of moneysavingexpert.com.
  • LokoloLokolo Forumite
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    silvercar wrote: »
    I wonder on the logic of having an interest rate much higher while you are studying until 8 months later, then having a lower interest rate from then on.

    I don't think much logic was thought about with the 2012 onward loans....
  • Ed-1Ed-1 Forumite
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    silvercar wrote: »
    I wonder on the logic of having an interest rate much higher while you are studying until 8 months later, then having a lower interest rate from then on.

    It was to put off those who could afford to pay upfront from simply taking the loans and making money on them as they were so low-interest before 2012.

    It was designed to make people think twice about whether to pay up front or take the loans. By imposing a higher interest rate while studying people can't 'wait and see' whether they get a job leading to low/high earnings but instead have to decide whether to gamble on the interest hit and then being a high earner.

    With the £21000 repayment threshold for plan 2 turning out to be so much higher relative to earnings than was thought in 2010 though it pretty much wins to take the plan 2 loans in most circumstances (unless the threshold changes :eek:).
  • Ed-1Ed-1 Forumite
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    Lokolo wrote: »
    Thanks for the good news! A student loan rate of 0.9% and a mortgage rate of 1.5%! Cheap cheap cheap.

    With the threshold also now changing yearly by RPI is it good news to have a low RPI?

    It depends on whether you took out loans from 2006 onwards and are likely to benefit from a 25 year write off or not - if you are then you want a high RPI as this means a higher threshold and so lower repayments.

    If you are likely to pay it all off then you want a low RPI as this means lower interest and so leads to lower repayments overall.
  • silvercarsilvercar Forumite, Board Guide
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    Ed-1 wrote: »
    With the threshold also now changing yearly by RPI is it good news to have a low RPI?

    It depends on whether you took out loans from 2006 onwards and are likely to benefit from a 25 year write off or not - if you are then you want a high RPI as this means a higher threshold and so lower repayments.

    If you are likely to pay it all off then you want a low RPI as this means lower interest and so leads to lower repayments overall.

    There comes a point where you are concerned with the value of your earnings, not just the interest you pay on your loan.
    Usually found at a vaccine centre 💉
    I'm a Board Guide on the Debate House Prices & the Economy, House Buying, Renting & Selling, Mortgages and Endowments, In My Home incl DIY, Overseas Holidays & Student boards.
    I volunteer to help get your forum questions answered and keep the forum running smoothly.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to [email protected]. Any views are mine and not the official line of moneysavingexpert.com.
  • LokoloLokolo Forumite
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    Ed-1 wrote: »
    With the threshold also now changing yearly by RPI is it good news to have a low RPI?

    It depends on whether you took out loans from 2006 onwards and are likely to benefit from a 25 year write off or not - if you are then you want a high RPI as this means a higher threshold and so lower repayments.

    If you are likely to pay it all off then you want a low RPI as this means lower interest and so leads to lower repayments overall.

    Yes I suppose I am being a bit selfish. I have halved my student loan in 3 years and it will be paid off in the next 3 without OP. So having low interest is helping that.
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