Should I get a uni maintenance loan just to put it in a savings account?

Student loans are no longer low interest and you are highly unlikely to make any money from investing it like you could 2 or 3 years ago.
My advice is don't take out any more than you need to (it's not all or nothing so you can opt to take as little as you like).

Reply 4

If you have well off family you could offer to borrow from them and pay them 3% interest (roughly what they wouldearn in a savings account) as this would still easily be lower than the interest you would pay on a student loan.

Reply 5

username2393237

Don't you have to declare any scholarships, bursaries, family income etc? You may not get the full amount.

Reply 6

It's one of the lowest interest loans you'll ever get in your life; it's worth taking even if you are just going to squirrel it away.

It's always helpful to have money on hand!

Reply 7

Original post by IWMTom

It's one of the lowest interest loans you'll ever get in your life; it's worth taking even if you are just going to squirrel it away.

It's always helpful to have money on hand!

The student loan interest rate is 3%+RPI which means it's currently 4.6%.

A Cash ISA generally earns about 1% these days.

Not worth doing...

Also, if OP is in the fortunate position of having enough household income not to need one, they probably will only qualify for the lowest amount of maintenance loan (2017/18 £3,928).

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Reply 8

Tiger Rag

22

You never know when you may need it. For example, some people who lived at home for first year, move out for second. They take the loan and use that as their deposit for the second year. It also means that if for whatever reason your loan is delayed for second year, you've got some money there if you need it.

It has one of the best payment plans (you only pay it back once you reach £21k per year and it's wiped after 30 years) around.

Reply 9

Original post by Doonesbury

The student loan interest rate is 3%+RPI which means it's currently 4.6%.

A Cash ISA generally earns about 1% these days.

Not worth doing...

Also, if OP is in the fortunate position of having enough household income not to need one, they probably will only qualify for the lowest amount of maintenance loan (2017/18 £3,928).

Posted from TSR Mobile

I don't think you read my post correctly - I said it's the lowest interest loan they'll ever get, NOT that they would profit from it.

Bearing in mind the amount OP would pay each month doesn't change, and only the duration does, it makes financial sense to take it and put it towards a mortgage or a car where financing is of a much higher interest rate.

EDIT: Just did the calculations, and assuming a starting salary of £30,000, the debt would be wiped before OP repays it all anyway (and that's just tuition).

(edited 7 years ago)

Reply 10

bex.anne

OP

Original post by IWMTom

I don't think you read my post correctly - I said it's the lowest interest loan they'll ever get, NOT that they would profit from it.

Bearing in mind the amount OP would pay each month doesn't change, and only the duration does, it makes financial sense to take it and put it towards a mortgage or a car where financing is of a much higher interest rate.

EDIT: Just did the calculations, and assuming a starting salary of £30,000, the debt would be wiped before OP repays it all anyway (and that's just tuition).

So if I were to get the maximum loan £9+8K for 4 years (NHS pays for years 5+6 of medicine), thats £68,000, would the debt end up being wiped off before I payed off all of it?

Reply 11

Original post by bex.anne

So if I were to get the maximum loan £9+8K for 4 years (NHS pays for years 5+6 of medicine), thats £68,000, would the debt end up being wiped off before I payed off all of it?

Are you sure you qualify for the max maintenance loan?

Also you don't receive the tuition fee loan. It is paid direct to your university.

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(edited 7 years ago)

Reply 12

bex.anne

OP

Original post by Doonesbury

Are you sure you qualify for the max maintenance loan?

You don't receive the tuition fee loan. It is paid direct to your university.

Posted from TSR Mobile

Oh okay I didn't know that. I've just checked and I'd get around £6,500 in maintenance loans, but I also get around £4,000 from scholarships and bursaries (which is the same price as my rent). Not sure if I should bother taking out the £6,500 because I won't really need that much extra would I?

Reply 13

Original post by bex.anne

So if I were to get the maximum loan £9+8K for 4 years (NHS pays for years 5+6 of medicine), thats £68,000, would the debt end up being wiped off before I payed off all of it?

Obviously, it depends on how much you earn, but even basing it just on 4 years tuition at £9,250 you would need a starting salary of £30,000 to pay it off entirely within the 30 year period (and that's accounting for inflation, and salary increases).

Have a play around with Martin Lewis' calculator at http://www.moneysavingexpert.com/students/student-finance-calculator to see a visual representation of how things work - I'd take whatever SFE will give you if I were you; it makes sound financial sense.

Original post by bex.anne

I've just checked and I'd get around £6,500 in maintenance loans

Based on these figures, you'd therefore need a starting salary of around £42,000 to pay it off within 30 years.

(edited 7 years ago)

Reply 14

Original post by bex.anne

Oh okay I didn't know that. I've just checked and I'd get around £6,500 in maintenance loans, but I also get around £4,000 from scholarships and bursaries (which is the same price as my rent). Not sure if I should bother taking out the £6,500 because I won't really need that much extra would I?

Are you sure the bursary is not means tested? Often they are only available if you qualify for the max maintenance loan, or sometimes they are still available but at reduced levels depending on household income.

Also your rent seems relatively cheap. Which university is this?

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Reply 15

Kvothe the Arcane

Original post by Doonesbury

Are you sure the bursary is not means tested? Often they are only available if you qualify for the max maintenance loan, or sometimes they are still available but at reduced levels depending on household income.

Also your rent seems relatively cheap. Which university is this?

Posted from TSR Mobile

£4000 for rent isn't that cheap for a shared 44 week tenancy.

Reply 16

In medicine you will likely earn enough to pay it all off before it's wiped, your salary starts at around 26k and you can expect to be on 40k by 5 years, 45k by 7 years after you graduate.
Find a junior doctor to speak to about this as you are being given some bad advice above!

(edited 7 years ago)

Reply 17

Remember too that interest is charged on a student loan from the day you take it, so even putting it in savings, you'd be losing money from day 1. If you don't take a maintenance loan for first year, it doesn't mean you then can't take one in second year if you find you need cash.

Reply 18

Original post by IWMTom

xxx

SFE interest rate is increasing to 6.1% in September.

https://www.theguardian.com/money/2017/apr/11/student-loan-interest-rate-rise-uk-inflation-brexit

"But from September this [SFE interest rate] will rise to 6.1%, made up of the March 2017 [RPI] figure of 3.1%, plus 3%."

Reply 19