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Original poster

Should I pay off my student loan?

27 replies

username0803 · 03/08/2023 20:56

In light of the interest rate rise today to 5.25%, that now means my student loan interest rate is at 6.25%. Obviously my monthly payment won't change as it's based on salary, but the time it will take me to pay it off will obviously now increase. Would I be crazy to just pay this off?

Important info:
I'm 32.
I have a pre-2012 student loan with a balance of around 4K.
I also have a mortgage of around 40K outstanding at an interest rate of 4.2%.
I have savings of 15K.

Should I just pay off my student loan or keep it saved up so I can inject more into my mortgage?

OP posts:
anniegun · 05/08/2023 09:49

I would pay it. Its a small amount so you will undoubtedly pay it off at some point and its a high interest rate. It would be very different if it was a larger amount that was likely to be written off

benfoldsfivefan · 05/08/2023 10:19

anniegun · 05/08/2023 09:49

I would pay it. Its a small amount so you will undoubtedly pay it off at some point and its a high interest rate. It would be very different if it was a larger amount that was likely to be written off

I agree. Peace of mind is a wonderful feeling. But I wouldn’t use almost a third of my savings in one go, I’d just heavily overpay using a combination of savings and wages. To immediately go from savings of 15K to 11K seems risky - who knows what emergencies may be round the corner?

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