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Original poster

Pay off student loan?

15 replies

bonzaitree · 26/10/2023 20:07

Hello everyone,

I think I know the answer to this but just trying to consider all angles. I have a student loan which is only £3.5k to pay off. (UK government student loan).

Im applying for a mortgage in January. I can only see paying off the loan as a good thing for the mortgage app because (a) less debt and (b) higher monthly income.

currently costing me £400 a month ( I know fucking wanker government) so it would be paid off pretty quickly anyway (but not before mortgage application)

Have I failed to consider something really important here or shall I just pay the damn thing off?

OP posts:
funbags3 · 26/10/2023 20:11

I was told that a student loan isn't taken into consideration when applying for a mortgage.
If I had the money though, I'd definitely get rid.

michaelmasdaisies · 26/10/2023 20:19

How long until it is wiped off? Generally student loans aren't like normal loans, and you shouldn't overpay because they're likely to eventually wipe. But if you're close to paying it off that might not be the case for you.

Lazycatx · 26/10/2023 20:19

Pay it off, they still ask about it during the mortgage application. It is not an interest free loan and you'll have more income each month :)

TeenLifeMum · 26/10/2023 20:19

Mortgage companies couldn’t care less about student loans.

Original poster
bonzaitree · 26/10/2023 20:23

beetr00 · 26/10/2023 20:22

Yeah so essentially it won’t affect creditworthiness but it can affect affordability. Ie I have £400 per month extra to spend on a fucking mortgage 🤣

OP posts:
Hearmenow23 · 26/10/2023 20:23

I always left mine due to stretched finances, but the rate now is over 6% which is outrageous! I would definitely try and clear it. I'm not sure about the mortgage and affordability checks, but that is a large monthly outgoing that you could do without. You can't pay them off with a credit card either.

Original poster
bonzaitree · 26/10/2023 20:25

michaelmasdaisies · 26/10/2023 20:19

How long until it is wiped off? Generally student loans aren't like normal loans, and you shouldn't overpay because they're likely to eventually wipe. But if you're close to paying it off that might not be the case for you.

Well I pay £400 per month and there’s only £3.5k left lol. So it will be paid off soon in any event.

OP posts:
CobwebsAndCauldrons · 26/10/2023 20:26

In a similar scenario, I paid mine off. Apart from anything else, it was just nice t get it off my plate and get the the point of not having to hand over £400 a month as soon as possible.

Bartlebum · 26/10/2023 20:29

Yes, pay it off as it affects affordability. I paid mine off recently too and it's amazing to have that extra money in your account each month.

Jmaho · 26/10/2023 20:36

I work in mortgages. We used to ignore them but now we deduct them in the same way we would any other loan or credit commitment so it absolutely does affect affordability. Probably some lenders out there that ignore still though

CatsTheWayToDoIt · 26/10/2023 20:44

Paid mine off today! Feel great about it, so I say do it.

Original poster
bonzaitree · 26/10/2023 22:48

pay it off wins.

congrats to those who have also done this recently.

OP posts:
LadyLapsang · 26/10/2023 23:33

Remember to contact them to stop deductions at source first, so you don’t overpay.

Maxoutnowwhat · 27/10/2023 22:11

I think it depends on if you need the £3.5k in hand towards your deposit/costs etc? I'd you don't need it in hand then paying it off sounds like a good option for you!

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