I have been working in a graduate role for some time and have managed to save £30k.
Now my student loan payment is nearly £200 a month as I was under the old plan and have a post grad loan too. In total my loan isn’t very high. Probably 19k.
Would it be sensible for me to just pay the student loan off so I’m debt free or should I leave the savings for a deposit. I intend to buy a house within the next 2 years. Having debts is something that stresses me and that is the reason why I thought of paying it all off
4 comments
Look at moneysavingexpert.com there is an article that discusses it.
If debt stresses you out, mortgages ard debt ad well
House prices are gonna rise faster than your debt interest
If you’re on plan 1 (pre 2012) almost certainly not. It’s 1.5% interest and the best interest loan you’ll probably ever get. Plus, it’s not “real” debt in the sense you don’t have to worry about it if you’re not working like other debts, and it’s not taken into account when getting a mortgage like other debts are.
Student loan plan 2 where the interest is higher is slightly different but even then most likely it’s not most efficient to pay it off.
That £30k is best used for your deposit.
Wouldn’t bother personally, would rather have my savings.