To wonder why anyone rushes to pay off their student finance?

[ChoppedChorizo]

A couple of friends of mine make regular overpayments with a view to paying it off quicker. Some have used inheritance to clear it. I don’t understand the motivation? The lot gets written off if you haven’t paid by X number of years.

Mine has continued to increase - I started uni in 2012 so my fees were around £7k per year. Plus living. It sits around £23k now.

Ive earned well enough but did a post grad (self funded) two years of training on the job and then had children and so two years of mat leave.

I don’t see the motivation to pay it off sooner.

Sure, it all depends what other debt you have and what the interest rate is on each. Focus your overpaying on whatever has the highest interest rate.

To bring this back to your original question (why are some friends trying to pay it off sooner):

• The student loan interest rates are higher than the interest you’ll get on a savings account, so - unless you’re never going to pay your student loan off - this is a very sensible use of savings (you mentioned friends using inheritance).
• Their other debts e.g. mortgage might have lower interest rates than student loan.
• Given that you’re right on the cutoff yourself between plan 1 and 2, they might be paying higher interest rates than you.

People determined to not pay back loans doesn't help though, does it?

£10k isn’t much though. My fees were £7k per year. Then around £3k on accommodation. I did a self funded post grad at £12k and then supported myself that year. I earned about £25k out of uni, but then had a mortgage etc to pay.

My Student loan absolutely was a consideration for my mortgage.

I earn a fairly decent salary but not outrageous . Tbh it was depressing to see how much comes off. I will definitely pay mine off before it expires, I’d love to clear it. I’ve never got the claims not to bother and worried I had missed a trick somewhere but it’s confirmed I’m correct that clearing it would be the best outcome for me.

I’m surprised that so many go to Uni and earn so little. My debt is one of the reasons I will only encourage my DC to go to uni if they need a degree for a specific career aspiration. Apprenticeships all the way here.

Because if they're taking it off you anyway you may as well pay it off quicker, at last look my student loan interest rate was thrice my mortgage rate - good sense dictates I'd make overpayment on SL way before my mortgage.

You sound financially illiterate that you can't understand this.

My student loan was taken into account for my mortgage which I was very taken aback by

The more pressing point is how we a country voluntarily allow and actively encourage millions of 18 year old to go into 50k 60k of debt year after year, without giving them the full financial literacy needed to make a considered decision or aware of the long term impacts

It's a fucking national scandal

It’s not a “determination” it’s a best value decision. I’m still economically productive.

Many, many people don't have a degree. Do you know what your mortgage interest rate is compared to your student finance interest rate? The monthly amount isn't what determines which debt you should repay first.

It’s pretty average to get a degree these days to be fair

It’s definitely factored into mortgage affordability, not sure why people maintain the lie that it isn’t. While it isn’t treated the same as a £30k unsecured loan it is treated as a regular outgoing and therefore reduces the amount you can borrow.
You literally have to give the repayment figure in the outgoings part of any mortgage application.

I was referring to the poster who said they were determined not to pay it in full.

Well exactly - I don't even remember the interest rate, but I did the sums and new I would be earning enough to make it a waste of money to keep it.

I can't remember if I paid it off before or after I got a mortgage, but it was way, way before kids.

There's no point accumulating interest you don't have to, if you're going to have to pay it off eventually anyway (which I was) - just as other people say, pay them off in order of highest cost first.

The rates are currently similar, but obviously a much bigger capital repayment, that and the term of my mortgage is longer than the term of the student loan (and I will always have to pay that capital off).

My student loans debt has been sold off to a debt collection agency after I was late deferring one year .

I’m not lying, it may be factored in but I know with certainty I’ve never been asked what the balance is and have had four separate mortgages since I graduated.

Really??

Because you avoid interest and aren't burdened by it for many, many years. I finally paid mine off in the year my eldest took out his. If I could have paid it off and have had an extra £120 a month to put food in mouths and clothes on backs, I would have done!

You have to just view it as a tax on your degree, it's not technically a loan as it's taken off at source.

It was called a loan as Tony Blair had told the people he wasn't going to raise taxes, so he called it a loan- learnt that from Martin Lewis.

I can't wrap my head round why people who don't earn over the threshold and have no intention of paying even bothered to get degrees in the first place?

The whole point of a degree is to enable a higher ability to earn? So pay the tax (loan) and earn more?

They ask you the monthly payment.
You have to list all your financial commitments on any mortgage application like student loan, personal loans, childcare etc.

Yes agreed, it’s on my payslips - but I’ve never been asked what the outstanding balance is.

Sorry for ruining the economy by paying off my student loan as per the rules set by the government @Nobodyknowsitall.

It was Martin Lewis’ advice that I followed in not prioritising paying it off. He always said to pay it last.

It is your intention to not pay it off that is the problem.

Because it’s less relevant as the balance doesn’t change the monthly payment.

I went to Uni when I was in my 30's, had the grants and loans etc. Finished uni in 2009, and have been paying off my loan via salary for what feels like forever.

I make my final payment this summer and quite honestly I'll be glad to see the back of it. The money will then go on pushing down our mortgage.

They just take it out your salary if you're above the repayment threshold. So you're paying interest on that as well as on your mortgage? Maybe other people have someone else to enable them to earn less and have a mortgage?