The Student Room Group

Save and pay off student finance or just let the 9% get taken off yearly?

As the title suggests I'm wondering whether it's worth saving up money and paying off my student finance as soon as I can, or if it's financially better to let the repayments be until they're wiped off.

If it helps, I've just graduated this summer so my repayment beings in April, I have around 10k in savings, and I've started a grad job that is below the repayment threshold so come April i won't even be making payments.

My issue is with sfe repayments and the fact that the amount you owe goes up every year, regardless of how much you pay back. Once I get paid over 27k, likely another year, the amount I owe will be higher and my repayments will be for that higher amount.

Sorry if it's confusing, I'm just wondering if I'm better off making some decent savings over the next few years and just paying it off or if I should wait till i earn 27k and just let sfe take money off me for the next 30 years.
(edited 1 month ago)
Original post by Jaffacake1212
As the title suggests I'm wondering whether it's worth saving up money and paying off my student finance as soon as I can, or if it's financially better to let the repayments be until they're wiped off.
If it helps, I've just graduated this summer so my repayment beings in April, I have around 10k in savings, and I've started a grad job that is below the repayment threshold so come April i won't even be making payments.
My issue is with sfe repayments and the fact that the amount you owe goes up every year, regardless of how much you pay back. Once I get paid over 27k, likely another year, the amount I owe will be higher and my repayments will be for that higher amount.
Sorry if it's confusing, I'm just wondering if I'm better off making some decent savings over the next few years and just paying it off or if I should wait till i earn 27k and just let sfe take money off me for the next 30 years.

If it's worth while paying it off earlier than planned then do it as you will save on paying interest.
If you are unable to do anything about paying it off earlier then obviously you'll have to wait until you start earning.
Original post by Jaffacake1212
As the title suggests I'm wondering whether it's worth saving up money and paying off my student finance as soon as I can, or if it's financially better to let the repayments be until they're wiped off.

If it helps, I've just graduated this summer so my repayment beings in April, I have around 10k in savings, and I've started a grad job that is below the repayment threshold so come April i won't even be making payments.

My issue is with sfe repayments and the fact that the amount you owe goes up every year, regardless of how much you pay back. Once I get paid over 27k, likely another year, the amount I owe will be higher and my repayments will be for that higher amount.

Sorry if it's confusing, I'm just wondering if I'm better off making some decent savings over the next few years and just paying it off or if I should wait till i earn 27k and just let sfe take money off me for the next 30 years.

It's not an easy question to answer. I'd recommend you read the article on the following website:

https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/
Original post by Littleemma98
If it's worth while paying it off earlier than planned then do it as you will save on paying interest.
If you are unable to do anything about paying it off earlier then obviously you'll have to wait until you start earning.

Yeah I suppose so. Thanks x

I'm just trying to work out what's financially best but there seems to be no clear answer so I'll save some more money this year, as has always been my plan, and if it's a significant enough amount I might put it towards paying sfe.
Original post by normaw
It's not an easy question to answer. I'd recommend you read the article on the following website:
https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/


According to this a 32k salary leads to £450 a year in repayments so over 30 years that's only £13,500??? Even £900 a year in repayments is 27 grand in total wtf

Either my maths is f-ing atrocious or I should never ever ever make voluntary payments 😂
Original post by Jaffacake1212
According to this a 32k salary leads to £450 a year in repayments so over 30 years that's only £13,500??? Even £900 a year in repayments is 27 grand in total wtf

Either my maths is f-ing atrocious or I should never ever ever make voluntary payments 😂

Did you use the calculator for plan 2 loan on the MSE site that builds in salary increases?

https://www.moneysavingexpert.com/students/student-finance-calculator/

If you do manage to save a lump sum, think about whether it would be better saving that towards, for example, a mortgage deposit to get you on the property ladder rather than paying into your student loan, where it won't make any difference to your monthly repayments in the short term to medium term. :smile:
Original post by normaw
Did you use the calculator for plan 2 loan on the MSE site that builds in salary increases?
https://www.moneysavingexpert.com/students/student-finance-calculator/
If you do manage to save a lump sum, think about whether it would be better saving that towards, for example, a mortgage deposit to get you on the property ladder rather than paying into your student loan, where it won't make any difference to your monthly repayments in the short term to medium term. :smile:

Yeah thank you for that link haha, I've realised it'll be waaaay more financially sustainable if i just save money for the next few years and use it for investing rather than paying my student loan.
If I started paying my student loan voluntarily I'd make pay more than if I let that 9% get taken off as I'm not currently on the payment threshold salary and realistically won't be for another 2/3 years.

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