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Paying the debt
Former Member
Posts: 1,876,323 The Mix Honorary Guru
If i manage to get the money together to pay back tuition fee loans, do you think the LEA would let me pay them in one or two installments by cheque, instead of waiting till i earn over £15,000?
has anyone else done this?
has anyone else done this?
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I'm not entirely sure what rate they would charge but most lenders will generally wack a fee on top of the loan amount if it's to be paid off early.
I have started paying mine off voluntarily, I did a big lump sum and do a standing order for about £120 extra a month.
Some people will say to keep hold of it as long as possible as the interest you can earn in a high interest savings account is usually higher than the rate that the SLC charge although it depends on your individual circumstances as to whether or not this is a good idea. If you are in receipt of means tested benefits it makes sense to pay off your debts more than to save as they don't off-set savings against debts so they could calculate you to be richer than you really are.
I thought that by paying it all, i would be totally clear of it.. without all this,' they might think you are richer', stuff. i'm glad to read that there is no fee for paying loans off early though.
..and er..never you mind how i'm getting the money icey.. lol. :P
My parents make the odd payment off my brothers student loan as well as what he pays through his job.
You would be.
There is no real interest. The rate charged on the loan is equal to a measurement of inflation. The loan stays the same size in real terms. If your income increases above that rate of inflation its tied to its better to pay it off as slowly as you can.
If you are paying it through a lump sum you recieved off of someone you will lose potential earnings if it can recieve a interest above that rate of inflation.
Not anymore it isnt
They've carefully redefined the rate of inflation they use for most things while leaving the student loan one on the old system so it's about 4.5% at the moment.
If you can put the money into high interest savings, and then keep adding the interest to the savings then you'll be better off doing that.
If you're on low income and borderline on being eligible for all sorts of exciting benefits then you are possibly better off paying off your student loan then you won't be exempt from support because of your bank balance.