Advice on student loan please

[Ste23321]

Please can someone give me advice, just been on phone to SLC and they not helpful at all.

I’ve been avoiding thinking about this as it just causes anxiety but I need to sort out:

Took out first student loan for undergraduate degree in 2001. Then did my post grad and took another out. Was in full time work for the next 10 years and over around £200-300 came out every month from pay into SL. Then had kids, took maternity leave and went to work part time. Had a couple of years of not working at all. during this time interest still being added to my balance so balance kept going up.

I just phoned SLC to get balance and been told my balance is just over £13,000! Bear in mind original was something like £16-19(I’ve got login in details now so can get exact figure later). I’m just shocked that after all these years of paying it’s still so high. I know it’s because of the interest rate (the advisor said it varies snd right now is 1.1%). I heard it gets written off at some point abs advisor said for me will be when I’m 65 years old.

I’m confused what to do. I’m actually thinking of giving up work do will be adding to this. He said I can make voluntary contributions too.

Please help me I’m feeling so anxious.

I don't even know what my total is and at the age of 41, 20 years later I've never paid a single penny back. The total naturally increases and I couldn't give a hoot.

That people choose to voluntarily pay it off above their requirement to is stupidity in the extreme imo.

[quote Ste23321]@Cocomarine thanks.

The issue is I will be earning more in the future. Right now I’m giving up work as my kids are stressed but will be temping (supply teaching) so buts will come out weekly but not much. After 5 years I’ll go back to a head of department job which is very well paid but stressful hence I’m leaving now.

In my head the loan is increasing but I need to stop looking at it like a credit card loan (btw I’ve never used credit cards, that’s why I feel I’m stressing so much)[/quote]
How much will you be earning in the future - and will you ever wipe the debt before it is cleared. This is the only question that matters.

If you will end up paying back more than you borrowed across both loans before the wipe - then you should pay chunks now. That's because you'll pay less interest.

On the other hand, if you won't ever pay back the total amount you borrowed making extra payments is a mistake. You'll end up paying more than you would otherwise unnecessarily.

On modern (big) loans - you need to hit well over £100k to touch the sides. So for most people there is no point overpaying.

Your loan is smaller so it's not as clear cut. You mentioned £16k for one loan, but didn't say how much the second one was.

You need to add up the total amount borrowed (ignore interest) and deduct what you've paid back so far.

How much is left?

You pay 9% of income over a certain threshold. (The threshold varies according to which plan you're on).

calculate what the annual payments will be (you can estimate for future higher income). Work out how many years you have left till it's wiped. Multiply the annual payments by the number of years. Is this enough to more than clear the debt before wiping?

If it is - pay extra now to minimise interest. If it's not - just pay standard monthly contributions.