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Paying off student loan

(14 Posts)
badg3r Wed 13-Jun-18 19:55:24

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?

leghairdontcare Wed 13-Jun-18 19:58:22

In most cases it's the former but without specifics it's hard to say.

Sofabitch Wed 13-Jun-18 20:01:06

Pre 2012 loan.. it might be worth it.

Post 2012 loan...mine is a fuck ton of money that I'll never ever come close to paying as I'll have to earn 50k a year for repayments to be higher than interest. So I probably wouldn't bother.

I will pay my Postgrad loan back if I get a chance though.

I'd be opting for a clear mortgage first though I think

thereinmadnesslies Wed 13-Jun-18 20:07:26

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.

badg3r Wed 13-Jun-18 20:19:12

That's good to know about them having a date they will be wiped out. How did you find that out?

badg3r Wed 13-Jun-18 20:20:29

For specifics, it is £15k still outstanding (I finished in 2009).

Sofabitch Wed 13-Jun-18 20:21:41

Which loan do you have?

The years its useful here. As is amount owed. And repayment amounts.

YBR Wed 13-Jun-18 20:26:17

Have a look at Martin Lewis:
www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

thereinmadnesslies Wed 13-Jun-18 20:33:18

www.moneysavingexpert.com/students/student-loans-repay This is the guide for pre-2012 loans.
According to this, your loan will be repaid 25 yrs after the first April following graduation.

thereinmadnesslies Wed 13-Jun-18 20:33:39

Sorry, I mean your loan will be wiped 25yrs after graduation

leghairdontcare Wed 13-Jun-18 20:34:02

What year did you start? That's important. And how much do you earn? Do you have other debts? Do you own your own home? Lots of factors.

thereinmadnesslies Wed 13-Jun-18 20:35:03

So how much are you paying off per year? Are you likely to clear that much by 2035?

badg3r Wed 13-Jun-18 20:40:59

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.

BigPinkBall Wed 13-Jun-18 20:44:51

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.

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