Is there any reason to make voluntary payments to the student loan?

If you can get a better return on savings than you are paying in interest on the loan (remembering to include any tax paid on savings interest in your calculations) then it makes more sense to put the money into a savings account (e.g. mini cash isa to avoid paying any tax and to discourage you from spending it without noticing)

I believe your student loan will reduce how much mortgage you can get so whether you pay it off or save the money for a deposit probably doesn't make that much difference to what house you can buy except that you won't need a 100% mortgage if you save for a deposit. How easy these are to get now I don't know but you typically pay a bit more in interest the higher the Loan to Value. (When I had a student loan mortgage rates were much higher than the interest on the loan so it didn't make any sense to pay any extra at all on the student loan until a mortgage was completely paid off but this might have changed now as I think the interest is no longer just inflation)

You should always pay off debts starting with those that have the highest interest rate. I had a student loan right at the beginning when they first came out and I paid it off as slowly as I was allowed (to the extent that my very last payment was for 1p (and they really did collect it although I'm sure it must have cost them more than that to collect))

Tim.

Only if you can't get a better rate (post tax) in a savings account than the interest (APR) you are being charged, or if you think it's possible you'll need to claim means tested benefits, where any savings might disqualify you.

That is incorrect. It is not on your credit record, and does not affect your mortgage whatsoever.

It is never a good idea to pay off your student loan, as the interest rate will always be lower than the best savings account, even after deducting higher rate tax.

So don't pay it off unless you have to!

Interesting. Do mortgage lenders not ask what other debts you have?

This article:

suggests that there are some people pushing for a student loan to appear on a credit record. (Maybe commercial lenders don't care much because if you are made redundant the requirement to pay anything on the student loan also vanishes so the banks are not going to be competing with the student loan for whatever the borrower can afford if they get into difficulties. At least at the moment I guess loss of income is the main reason people with mortgages default on their loans)

Tim.

I think that is one of the reasons why so many people get loans that they cannot afford. Lenders tend not to check to see what other debts you might have apart from doing a credit check. Buying a house may be the biggest commitment most people ever take on but i think that lenders still do not check to find out what other debts the borrower has apart from a credit check. Ive always assumed they do this because the house is thier security and they wont lose thier money.

> suggests that there are some people pushing for a student loan to > appear on a credit record. >

Unfortunately some lenders do care about some student loans. (I realise that's vague, but I've only got anecdotal evidence here).

I've never come across any difficulties with the old "mortgage style" loans - the ones that were taken out before 1998 - but I have come across lenders taking the new style loans into account. The banks appear to assume that your income is reduced by the amount that you're paying to SLC, and then calculate the maximum they'll lend you on that basis.

(The student loan doesn't show on your credit record, but lenders will still ask about them).

Mouse.

Until the massive house price crash comes........

So perhaps paying in some token amount each month (£10 for example) using the paying in book SLC sent me would show good financial housekeeping (that I prioritise paying off my debts), which could put me in good stead if having an appraisal by a building soc/mortgage provider?

"Miss L. Toe" wrote

Is there any reason to think it's more likely that will happen in the next 25 years, rather than in the 25 years after that, or ... ?

Yes,

Bird migration season is here again, therefore bird flu will hit with a vengeance, then it will mutate, then half the population will die, then the supply of houses will be much greater than the demand, so prices will drop.

(But I might be wrong).