Repaying Student Loans 2009/10 guide discussion

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  • Oldernotwiser
    Oldernotwiser Posts: 37,425 Forumite
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    LadyTea wrote: »
    Hi, now that my student loan has an interest rate of 4.4% it is now my most expensive debt. Can you use a credit card to repay your student loan and if so are there any charges for doing this?

    It may be your most expensive debt but do you actually have to pay it? If you were to be made redundant or to be taken ill you'd have nothing to pay on an outstanding student loan whereas you'd still have to make repayments on a credit card.
  • ca55ie
    ca55ie Posts: 254 Forumite
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    HI

    My mum wants to pay off a large chunk of my daughter's student loan (£10k). She doesn't understand its not necessarily the best way to help granddaughter financially - but hey ho thats parents for you :)

    My question is can she make this contribution to my daughter or will it be taxed as unearned income? Is there some way around this - I object to contributing further to the HMRC

    Thanks
  • Poolie
    Poolie Posts: 1,882 Forumite
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    Your mum can call SLC and make a payment to your daughters account if she wishes. If she does this with a credit card then they will 1.5% to the amount. As the payment is direct to SLC then their should be no need to involve HMRC.
  • ca55ie
    ca55ie Posts: 254 Forumite
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    Excellent news, thank you Poolie for your prompt reply
  • bristoljon
    bristoljon Posts: 6 Forumite
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    Hi,

    I'm a graduate with about £6,000 of student loan (post 1998) outstanding. I'm earning £25,000 a year and am paying back by PAYE.

    I have £10,000 of savings, £3,000 in index-linked NS&I bonds and the rest currently just sat in my account earning no interest. Annoyingly I missed the chance to put all of it in the NS&I bonds and now can't find any inflation beating savings accounts.

    The interest this year on my student loan is only 1.5% but I'm wondering whether it makes sense for me to pay it back with my 'savings'.

    I know it normally doesn't make sense to pay back early but if my savings are losings due to inflation, is it the right thing to do?

    Thanks in advance,

    Jon
  • Poolie
    Poolie Posts: 1,882 Forumite
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    If you pay the student loan back then you won't be able to access the cash again in case you need it. I would personally not worry about your student loan and look at some good investments (savings or otherwise) for your cash.
  • LadyTea
    LadyTea Posts: 2 Newbie
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    Poolie wrote: »
    MrsManda it appears that LadyTea has a pre 1998 student loan and therefore would not have deductions taken from her salary.

    LadyTea - If you make a payment via Credit Card, Student Loans will charge you 1.5% on top of the amount you wish to pay. So make sure you factor this into your decision to make any payment.
    So, would it be possible to pay off my student loan with a 0% spending credit card or would that transaction be classed as a cash advance therefore not reaping any benefit??
  • Poolie
    Poolie Posts: 1,882 Forumite
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    LadyTea - It would depend on your credit card company and the terms and conditions you have
  • wee_minnie
    wee_minnie Posts: 27 Forumite
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    Hi I completed my Bsc in 2003 and started a post as soon as graduated. My total student loan is 8k. I have been paying approx £80 - £100 per month since graduating yet every year the SL statement says I am only paying off interest, net owed still 8k!!!

    I earn 25k at present, £100 per month student loan repayment. Does this sound right???? I suspect my employer taking off too much but would like advice before I contact student loan.

    Going by the website I thought that interest was set at 1.5%, but obviously I am paying way more.

    Thanks for any help
  • Oldernotwiser
    Oldernotwiser Posts: 37,425 Forumite
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    wee_minnie wrote: »
    Hi I completed my Bsc in 2003 and started a post as soon as graduated. My total student loan is 8k. I have been paying approx £80 - £100 per month since graduating yet every year the SL statement says I am only paying off interest, net owed still 8k!!!

    I earn 25k at present, £100 per month student loan repayment. Does this sound right???? I suspect my employer taking off too much but would like advice before I contact student loan.

    Going by the website I thought that interest was set at 1.5%, but obviously I am paying way more.

    Thanks for any help

    You should be paying 9% of everything over £15,000, so on £25,000 you should be making annual repayments of £900.
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