Martin Lewis VIDEO: Should you pay off your Plan 1 student loan?

Comments

  • silvercar
    silvercar Posts: 46,940 Ambassador
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    I would like a calculation based on the total debt being at the level it is at the time it goes into repayment. In my mind there is less value in saying it won’t all be cleared so you shouldn’t pay it off if a proportion of that debt is only accrued by the interest charged while it is in repayment.

    Compare instead the amount it is after graduating with the total repayment amount you will have to pay over the following years.

    Example. If the total loan is £20k after graduation, but with interest charged it becomes £30k by the end of the term, you should be comparing clearing the £20k with the total repayments, rather than saying some of the £30k will be written off at the end.
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  • fdrumm
    fdrumm Posts: 1 Newbie
    Martin talks about comparing student loans with saving accounts. If i paid £100 in student loans per month and cleared the debt. Would paying that £100 into a pension not gain me more money long term than the difference between base rate and savings rate.
  • phillw
    phillw Posts: 5,593 Forumite
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    fdrumm said:
    Would paying that £100 into a pension not gain me more money long term than the difference between base rate and savings rate.
    You're comparing cash and investments, different risk profile. Nobody knows what it will be worth.
  • freesitenews
    freesitenews Posts: 2 Newbie
    First Post
    ain me more money long term than the difference between base rate and savings rate.
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