Author Topic: UK student loans  (Read 2837 times)

tlo

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UK student loans
« on: February 23, 2012, 07:37:57 AM »
Hi,

I've got a ~20,000 student loan here in the UK, wondering if there's any merit to trying to pay off extra.

Current Interest Rate: 1.5%

and they take payments of 9% of everything I earn above 15,000 a year

With the interest rate so low, is there any reason to pay it down faster?

I'm assuming saving at a higher % would be the sensible thing to  do.

arebelspy

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Re: UK student loans
« Reply #1 on: February 23, 2012, 08:01:45 AM »
With the interest rate so low, is there any reason to pay it down faster?

No.

I'm assuming saving at a higher % would be the sensible thing to  do.

Yes.

Also, are you sure you're from the UK and not Germany?
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chrissyo

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Re: UK student loans
« Reply #2 on: February 23, 2012, 08:38:56 AM »
I agree the best thing is to save elsewhere. We didn't pay anything more then the minimum required, and instead focused on paying off the mortgage and contributing to our pensions.

tlo

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Re: UK student loans
« Reply #3 on: February 24, 2012, 10:32:07 AM »
Excellent, that's what I thought..

Just wanted to check I'd not missed anything.

Uni in the UK used to be a great deal, cheapest loan ever.. I feel for the people starting now, higher cost and higher interest.

MsLogica

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Re: UK student loans
« Reply #4 on: February 24, 2012, 01:01:50 PM »
I've just posted about this in the other thread about UK uni costs, but agree with you that you shouldn't try and pay it off early.  It's the best loan you're ever going to get, so make the most of it by saving for other things instead!

richinlondon

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Re: UK student loans
« Reply #5 on: February 27, 2012, 06:09:07 PM »
Yes, the loan follows the rate of inflation so it's not worthwhile paying off unless inflation rates went really high and all you were doing with money was saving it in a bank account at 0.5% (i.e. you had no other debt, no mortgages and no willingness to invest in shares etc).