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Original poster

Should I pay off my student loan in full?

82 replies

Coolbreezee · 07/11/2024 19:11

Currently on maternity leave.
I have £21k left on my student loan. £40k in the bank.
I plan to return to work in 12 months time.
My salary will be in the ballpark of £35k rising to £50k in the next couple of years.
Interest on my loan is approx 7%.

If I pay off my student loan I will be completely debt free. I will need to use some of my savings to get through maternity leave but will be in a good position to save when I get back to work.

Im just not sure what the best option as there are too many unknowns. I feel like with my salary I will be one of those people who ends up paying the loan off plus a LOT of interest. Any advice would be greatly appreciated.

OP posts:
Zippidydoodah · 07/11/2024 19:18

Mine is written off after 30 years, and as I’ve worked part time for years, I haven’t been paying it consistently. I don’t count it as debt really.

ru53 · 07/11/2024 19:17

Go to money saving expert and read what Martin Lewis has to say on this. You may not be be better off paying the loan off, depending on your circumstances. Set up a spreadsheet and do the maths on how much you will end up paying back overall.

pizzapizzadaddio · 07/11/2024 19:16

It’s such a hard call because it depends on future earnings. When will it be written off? If you paid it you’d have about 20K in the bank - how many months’ of emergency savings does that represent?

I’m also on mat leave and actually paid mine off today (yikes!) as I learnt it won’t be written off till I’m 65 so I’ll have to pay it off eventually and as you know, interest rates are high right now

Yours will probably be a newer loan though so written off sooner.

MumOfOneAllAlone · 07/11/2024 19:16

I think martin lewis would say not to - something about the loan repayments not being real debt or something

Are you a homeowner? I'd use the money for my home or keep it in savings tbh x

Miloarmadillo2 · 07/11/2024 19:13

What is your housing situation? Do you need a lump sum at some point for a house deposit?

Pippa246 · 07/11/2024 19:12

As my old dad used to say ….No point in having savings if you have debt….unless debt is interest free. I’d pay it off.

user1494050295 · 07/11/2024 19:12

Hi email martin Lewis at money saving expert. He can advise