I have £33K in savings and my student debt is £31k - the interest is 6.3%. I'm 23 and currently earning £40K but it's an industry with big salary jumps, and plan to go contracting so I could be on 70-100K in 5 years time.

Should I just pay off my student debt now and stop it accruing interest?

  • Do you have other debts? Are you living comfortably off your current income and able to save some each month?
    – Hart CO
    Oct 22, 2018 at 23:44
  • @HartCO No other debts, I live comfortably, and I save quite a lot each month (~£1500 at the moment). Also I'm on plan 2 which I forgot to mention. Thanks for your answer btw.
    – Jonah
    Oct 23, 2018 at 18:27

2 Answers 2


It looks like you already earn too much to benefit from loan cancellation regardless of which plan you're on, so assuming you continue earning at your current or higher income you'll save a considerable amount of interest paying them off sooner.

Assuming you are currently living modestly enough to save some money each month I would reserve about 6 months of living expenses and put the rest toward wiping out the student loans with the intent of paying the remaining loan balance off quickly thereafter.

Note that if you're already in repayment and make an early payment for less than the total remaining balance, the amount your employer deducts won't change (fewer payments will be made, but still at 9%), so factor that into your planning.


I answered a similar question here.

As Hart CO's answer notes, the chances are you will end up paying off the loan before it is forgiven, so the high interest rate strongly indicates paying most or all of it off quickly.

The factors to balance against are:

  • Keeping the loan and your savings provides a hedge against any problems in your career (ill-health, career break, things not going as well as you expect).
  • Having the liquid savings might make it easier to buy a house or get you a lower interest rate.
  • 1
    That first bullet is a key one. At 23 years of age, most of your career is ahead of you; I'd be tempted to just stick it out a couple of years to be sure that your career really is on track and headed for those "big salary jumps" before dumping all of your savings into this. If something unfortunate happens and your salary takes a dive - or you lose your job completely - then your student loan payments will stop once you drop under the threshold, and if you can't pay it off then it will (eventually) be forgiven - and in that scenario, you'll be glad to have £33k handy. Nov 13, 2018 at 15:26

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