Paying off Student Loan

[Dinosauraddict]

I wondered if anyone wanted to join me in a paying off student loan thread? Before anyone says it, I will definitely pay the whole amount off before it's cleared, so it's beneficial for me to pay it early to avoid extra interest. I have sensible other financial provisions including pension so think this is a good thing to focus on. I thought if there were others trying to do the same, we could keep each other on track and act as buddies? I'm on Plan 1 and on my salary pay off c. £3.5k per year from monthly payments. Today I did my first overpayment of £185 - every little helps...?

Just curious - how much is the interest rate for plan 1?

By way of a motivator - I paid mine off last year (didn't over pay, although lots of overtime helped slice into it!) And it was such a boost to suddenly get an extra chunk of salary each month! (Which is now being thrown at mortgage overpayments...).

How much do you have left to go?

@EmeraldIsle81 Plan 1 interest rate is currently at 1.75%, so much better than Plan 2, but still something I'd like to be rid of.

@NeverTwerkNaked well done on paying yours off! I have just under £13k left on mine (graduated in 2013 and paid off over £10k so far).

Hmmm the money saving expert guy often does segments on this topic. He's never keen on overpaying to clear this debt. Your repayments are a bit like paying an income based tax, you only pay if you earn xx amount. There is an end date after which your debt is wiped (OP do you know what the term length is on Plan 1?) You might have other debts that have a higher interest rate so it's better to pay those first rather than the student loan. Once you put money towards paying off the student loan you can't ever draw it back out again - I recall someone inherited £10k and put it towards their loan, they lost their job and needed the money but couldn't get it back- was a pity,

@EmeraldIsle81 the loan would be wiped after 25 years from the April after graduation (about another 20 years for me) but mine would be cleared in less than 4 years on my current salary even if I got no promotions (unlikely) and didn't overpay. My only other debt is my mortgage, which I have a separate plan to overpay. I also own another property mortgage free, have good pension provision, and have just finished my house renovations. I know Martin Lewis rarely advises paying it off early, but in my circumstance I seem to be paying interest for no good reason I think? (I also want to repay slightly early before my next remortgage meeting at the end of fixed term so my affordability calculation looks better - I pay about £290 a month which is quite a bit!)

And part of the reason I haven't overpaid before is because I wanted to do things like build up a healthy emergency fund first in case of job loss etc, and had some large expenses I wanted to cover (infertility treatment for example).

I was in a fortunate position to borrow money off my mum to pay mine off (6.5k), graduate in 1999, three years ago.

By doing so I was able to buy more shares in my property (shared ownership) as I passed the affordability. I think I could borrow 5% of 250k (I'd also had a payrise so that was another x% - salary makes more difference to what you can borrow so it is worth looking at maximising your earning potential). This also reduced the amount of rent paid to the HA.

Just repaid mum (last payment next month).

That day I called SO to pay it off, the person on the phone could not believe it, she was more excited than me I think!

Now I am making mortgage overpayments and building up savings.

Well done on repaying your mum @highupoverthere I am very much looking forward to the day I no longer have a student loan hanging over my head!

So I just went to login into my sloan online and turns out you need a special answer ( as well as email/customer no and a password) nowhere online to reset the 'special answer'. How annoying.

EmeraldIsle81 one of the many great parts of dealing with the Student Loans company is trying to remember the passwords and security questions I set up twenty years ago.

They are a really awful and unpleasant organisation to deal with, accused me of fraud when my youngest child was little as I had about 6 months off work. They insisted my husband write a letter to say he was financially supporting me.

So, I intent to pay as little back of both my loans as possible. (Second one expires when I am about 50, first one when I am 65.) So I am in the exact opposite position to this thread!

@haveuheard - sounds awful!

My son paid his off four years after he finished 29k

@emarald Martin Lewis spoke to us recently about this and the girl who paid £10k from her inheritance despite the fact she was a social worker and her earning potential wasn’t that high. I do think he is right.

I keep getting texts to say "make sure you don't over pay" no idea if it is really from SLC or not as I haven't rang the number yet. It sounds spammy

Do you think this is real?

Also why would we end up overpaying ? Don't they just stop taking the money from my wages?

Thanks

@BrownStripePJ you are encouraged to change to paying out of direct debit 2 years before your estimated payback date, otherwise a lot of people end up overpaying through their salary (although it can then be claimed back but is a faff).