Debating whether or not up pay off my student loan in a lump sum. Is this a terrible idea because of the urban legend that they never get you to pay it all back anyway, or a super clever way to avoid interest it will accrue in the future?
Different tranches of loans have different dates when they will be wiped out. Mine (at uni 200-2003) will be wiped out when I’m 65. Some are wiped out sooner than this.
I’ve worked out that based on current repayment levels and interest, I am forecast to pay mine off in 8 years when I will be 45. Even if I earn less, I’m pretty likely to pay it off sometime over th next 28 years. Therefore paying it off early would save me 8yrs of interest.
Thanks for the picture therein... I started in 2004 so still a long way to go by the looks of things until it is written off! Repayments will be around £200 a month (just changed jobs)... I guess realistically then the sensible thing to do is pay it off as soon as possible. I had no idea they were structured so differently for different years - though the loans are so enormous these days it looks like hardly anyone is going to manage to pay them off within the timeframe. I'm so glad I got to go to uni when I did.
My student loan is about £15k, I graduated in 2009 and I earn just under the threshold for paying it back. Unless I suddenly get a huge pay rise I doubt I’ll ever pay it back.
Unless you’re on a high salary with no other debts, tons of savings and money to burn then it’s probably not worth paying it back because it’ll be written off after 25 years. Put your spare money into savings or your pension instead.