Should I pay your student loan in full?

As the title suggests, I would like to know what you guys think about paying in full the student loan.

I am almost close to having enough investments that can pay off my entire student loan balance but I would be left with little to nothing in investments.

If you guys were in that position, would you pay it in full? And why (in both cases)?

Depends, what interest rate do you pay on the loan? Personally, I fully use my student loan for investing as it’s at 0% interest (at least for 5 years) and I only have to start making the first minimum payments 2 years after I stopped studying after which I have 15-35 years to pay it off (if the interest rate changes significantly I would pay it off/stop borrowing but it’s set for at least 5 years).

I’m never gonna get a cheaper loan than this so I’m making full use of it but it might also give you peace of mind knowing that you don’t have that debt

I live in the UK, that means the interest rate is Retail Price Index (RPI) + 3%, as for now it’s 4.2%. Now my repayments are 9% of all my earnings above £2,274 a month (as for now, at least what the website says). And after 30 years whatever I have not paid, will be cancelled.

So paying the loan would net you a 4.2% return immediately, you have to consider yourself if a risk-free 4.2% return is better than the potential return that you get from your investments.


That seems quite high, but its been a few years since I’ve had mine paid off(I did not overpay).

To your question - if you let it ‘ride’ so to speak, do you think you would have it paid off in 30 years?

You need to look at it in different ways and how it would best work for you. Do you own a property for example, and if so, have you paid off more than 40% of its ‘value’ to get access to the cheapest mortgage rates?

Also - do you think you may ever need the value of your investments for another purpose - once you have overpaid, you cant ask for it back.

You could also look at it that your investments have not just a 4.2% headwind as well, as Etypsyno says really.


Don’t pay it off!
If ever your circumstances change financially for the worse you will stop paying (27k?)
After 30 years it’s scrapped anyway


Apart from the 4.2%, could it be the cheapest loan you could get?

For most people it is really a graduate tax rather than a loan.

Hard to say whether its worth paying off without modelling your future earnings/payments

I think I’ll go for your advice…

I wouldn’t mind if you pay my Student Loan in full at all. :wink:


I’m with Venetia but I will accept biannual payments.