Student Debt Free wannabe!! Can you help?

jamtart6 · 1 November 2007 at 12:24AM

Well its not technically me who is the DFW, but my OH and I are saving for a house and he has a student loan and wondered what to do.

I read Martin's article about student loans and how we shouldnt pay it back, but put the money in a high interest account instead...but the loan is just getting larger and larger and up to now I've luckily never been in debt, but as our fortunes are to merge when we buy a house, I am suddenly face with £8000 loan cos we will be in it together then!

The Student Loan company have increased their interest rate from 2.8% (which i know isnt much) to 4.8%.

Does anyone know how to work out how much we will end up paying back if we just pay the minimum off each month? I have no idea how to work out interest on loans and how much we pay back.

My OH says he doesnt want to pay it back more quickly than just the minimum, in case (a) they decide to cancel all loans and we've scrimped and saved to pay it back - does anyone think this is likely? (b) it is at such a low interest rate. However the way I see it (which contradicts Martin's advice sorry Martin love you lots still tho!:money:) we're paying off a minimum, but the loan is just getting bigger and bigger.

If we put it into a high interest account instead of paying it off, I can guarantee my OH would rather use it for a deposit on a house than to pay off his student loan.

Argh I am in such a pickle and have never had to deal with anything like this before, especially after I tended to disagree with the big mans advice in his student loan article.

So ... I am really just looking for some advice from you guys, and hope you dont mind me jumping on your board for a little while?? :T

ciarasdreams · 1 November 2007 at 12:36AM

Are student loans not automatically deducted as part of his tax code?

Larumbelle · 1 November 2007 at 12:39AM

Not ignoring you, just checking some things re: student loans with friend who is IFA. Will probably be tomorrow before I can reply. Hopefully someone will be wise before that, if not bump this up and remind me

jamtart6 · 1 November 2007 at 12:49AM

Thanks guys!

Yep, now that he is earning over £15k he gets c. £65 taken out each month which what i was meaning to be the minimum payment. it works out at about 0.01% over the whole loan. However, we graduated 2.5 years ago, and the lovely SLC charge you interest but dont ask you to pay it back until you earn £15k.

I really am grateful for any advice, I dont want this massive thing hanging over us whilst we are trying to secure our future with a house (altho it has no impact on how much mortgage we get) I just hate debt!!!

ciarasdreams · 1 November 2007 at 12:54AM

Just never include any of your partner's wage rises into your budget because I learned the hard way that every time your salary increases their share of it increases as well ans you you are left with a barely noticeable amount for yourself.

jamtart6 · 1 November 2007 at 12:40PM

bump ......................

Student Debt Free wannabe!! Can you help?

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