Should I make voluntary monthly payments to pay off my loan?

Here's my situation:

University 2012-15, graduated with £42,000 debt.

currently making voluntary monthly payments to pay off interest and a bit of the amount - paying £150 per month.

My parents are adamant that it is a debt that should be paid off asap, as it will affect getting a mortgage (buying a house in the far distant future, as my earnings are not high and probably won't be).

Hours of internet searching for articles gives mixed views so I've heard most of the arguments, but there doesn't seem to be any definitive answer.

Currently my parents are helping me out with money as I've got hardly any, (currently studying a new degree that's sponsored).

Reply 1

fxlloutboyy

21

It won't affect mortgage or credit score

Posted from TSR Mobile

Reply 2

Klix88

17

Original post by John1538

Here's my situation:

University 2012-15, graduated with £42,000 debt.

currently making voluntary monthly payments to pay off interest and a bit of the amount - paying £150 per month.

My parents are adamant that it is a debt that should be paid off asap, as it will affect getting a mortgage (buying a house in the far distant future, as my earnings are not high and probably won't be).

Hours of internet searching for articles gives mixed views so I've heard most of the arguments, but there doesn't seem to be any definitive answer.

Currently my parents are helping me out with money as I've got hardly any, (currently studying a new degree that's sponsored).

Your parents have misunderstood the natue of a student loan debt and it's costing you money that it doesn't need to. It is also keeping you reliant on them.

Your student loan will not be taken into account when applying for a mortgage. Even if it is in future, only the repayments will be relevant and these are proportional to your earnings at that time so they will have minimal impact on the amount you can borrow. Bear in mind that you are only liable to make repayments once earning over £21,000, and that repayment rates are calculated to have a minimal impact on you. Any outstanding amount will be wiped out 30 years after you graduate.

Student loans are not designed to be repaid in full by everyone who takes them out.

The fact that you are making voluntary payments, is actually diminishing your ability to save up for a mortgage deposit. Far from helping you get a mortgage, your repayments are actually hindering you in the long term.

You are an adult. Your student loan is in your name and it is none of your parents' business. Explain to them that they are wrong and take responsibility for your own financial decisions.

Making voluntary repayments when you are both below the mandatory repayment threshold and struggling financially, is just throwing money down the drain.

(edited 7 years ago)

Reply 3

Judge Jules

17

Original post by John1538

Here's my situation:

University 2012-15, graduated with £42,000 debt.

currently making voluntary monthly payments to pay off interest and a bit of the amount - paying £150 per month.

My parents are adamant that it is a debt that should be paid off asap, as it will affect getting a mortgage (buying a house in the far distant future, as my earnings are not high and probably won't be).

Hours of internet searching for articles gives mixed views so I've heard most of the arguments, but there doesn't seem to be any definitive answer.

Currently my parents are helping me out with money as I've got hardly any, (currently studying a new degree that's sponsored).

Don't pay any of it off, just wait until you get a good job. When you finish your other studies sign up with several different agencies on the high street to get a well paid job or apply online with Reed, CV Library, Indeed, Monster for Trainee Recruitment jobs as you need no experience and they love people with degrees plus some of them pay £40,000 or £100,000 a year so you'll clear your debt quicker earning those amounts but you don't need to pay anything now as £150 a month is quite a small amount to pay and won't make much of a dent anyway plus they don't expect you to pay any small amount until you get a job earning £21,000 a year or more so i wouldn't worry about it. Just keep the money saved in your bank account and dip into it whenever you want to buy yourself something and use it to have a good time while you can then worry about paying the money back when you get a well paid job but still let your parents give you money too and pretend your still making contributions to paying it off

Set up your own charity online asking rich people to help pay off your debt and pay off other people's debt to help them too, see if that works
Or set up a Go Fund Me

Should I make voluntary monthly payments to pay off my loan?

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