Paid all my student loan...yippiee
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setmefree2 wrote: »Yup so there are plenty of people who would be better off paying back student debt rather than mortgages because some of us have mortgages of just 0.99% (BOE base rate + 0.49%)
. RPI was 5.5% yesterday and doesn't looking like it's going down any time soon, so the student debt is likely to be more expensive that the mortgage debt in the future.
So a big congrats to the OP :T:T:T
Theres a clause in the student loan (well for most of us anyway, anyone after 1997) which means it also cannot be more than 1% above base rate.
So even if inflation was 10%, if base rate is 0.5%, it'll still only cost 1.5%.
Good times. Profiting like a maniac I am.
The OP was also presumbly overpaying when the loan rate was -0.4%. Now even surely you will admit that this makes no financial sense?0 -
Theres a clause in the student loan (well for most of us anyway, anyone after 1997) which means it also cannot be more than 1% above base rate.
So even if inflation was 10%, if base rate is 0.5%, it'll still only cost 1.5%.
Good times. Profiting like a maniac I am.
The OP was also presumbly overpaying when the loan rate was -0.4%. Now even surely you will admit that this makes no financial sense?
By overpaying when rates are low you can overpay more capital than interest, so when rates rise again you don't pay large amounts of interest as the loan has gone - simples!
The op has avoided paying interest at 4.4% this year and potentially 5.5% next year by overpaying the capital when it attracted no interest.
Anyway, it's all academic, as we nothing about the OP but if the OP is happy so am I. :T:T0 -
I know it's not likely, but have you thought about the risk of inflation getting out of hand, BoE rate rising quickly but saving interest rates not increasing in tow?So even if inflation was 10%, if base rate is 0.5%, it'll still only cost 1.5%.
I think accounts linked to the BoE rate are worth opening just as a fall back, even if you only keep £1 in there. It's a bit awkward that the current ones all seem to be ISAs though.
The OP could have saved the overpayments in a savings account thus effectively earning whatever the rate was there + 0.4%. If/when the rate increased the next year they could have made the student loan overpayment.setmefree2 wrote: »The op has avoided paying interest at 4.4% this year and potentially 5.5% next year by overpaying the capital when it attracted no interest.0 -
I know it's not likely, but have you thought about the risk of inflation getting out of hand, BoE rate rising quickly but saving interest rates not increasing in tow?
I think accounts linked to the BoE rate are worth opening just as a fall back, even if you only keep £1 in there. It's a bit awkward that the current ones all seem to be ISAs though.
Indeed, as well as index link certs - well, when they were available 0 -
For me its the fact of paying a debt off; that's more important.
Now i can concenrtate on my mortgage,
for me it was the right move0 -
congratulations. Sometimes its nice to know one thing is clear. No longer hanging over your head0
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setmefree2 wrote: »How do you know what interest rate the op was paying on their student loan or their mortgage?
Why wouldn't I know the interest rate on a student loan?
What I do know is that s/he'd still have to make the mortgage repayments if made redundant whereas nothing would be needed to be paid on the loan.
We have been here before!0 -
Congratulations, well done! I know how you feel with having the burden on your shoulders, it took me nearly 10 years to pay mine back, but what a relief when it was done.
Just the mortgage now!0
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