Comments on: Is it worth paying off my student loan in one go?

By: Jack McManus

Jack McManus — Fri, 15 Feb 2008 20:49:24 +0000

I was always told to never rush loan payments to improve credit score, but it does factor into overall debt when you combine student loans with house loans etc.

By: corey

corey — Wed, 23 Jan 2008 14:56:15 +0000

I came here by accident, but just might stay

By: The Suspect

The Suspect — Wed, 22 Aug 2007 08:07:15 +0000

Good article! I wrote something about paying off more than your monthly payment on hour home loan, and over the 20 year term of the loan, you end up saving thousands and thousands. It's always good to pay off your loans that have interest. Otherwise you end up making the banks rich……This is of course if you don't have other oppertunities where you could use this extra capital to make more money than what you could have saved.

By: Andy

Andy — Wed, 20 Jun 2007 19:58:43 +0000

Ouch! $140k yeah it seems weird that it will just be sitting in the background slowly ticking down!

Lookind foreward to the 30 year reunion! lol

I wonder how blogging will have changed in 30 years?!

Andy

By: A Tentative Personal Finance Blog

A Tentative Personal Finance Blog — Wed, 20 Jun 2007 18:59:08 +0000

I live in the US. My wife just finished optometry school with over $140K in debt. Fortunately our interest rate is locked in at 3.6% and with a good payment history will be at 2.6% after 3 years. It doesn't make sense for us to rapidly pay off the student loan. Financially we'll be further ahead at the end of 30 years, rather than paying off.

I must say that the idea of having a 30 year loan doesn't appeal to me all that much though, but I have to think looooooong term. It's not like prepaying a mortgage, because there's no direct equity or no way to sell it off right away to erase the debt. It's going to be a long road.

See you at my blog in 30 years. haha.

By: Andy

Andy — Wed, 20 Jun 2007 12:09:18 +0000

Thanks for the comment, I think it may be a county thing as you say. Here in the UK we do have a credit score but that is targeted toward personal (non educational) loans and mortgages etc. The Student loan scheme in the UK is government backed and due to the rules and the minimum payments being so low relative to salary this has virtually no effect on your credit rating. That is unless you do something silly and deffer minimum payments, but overpaying does not benefit your credit score as far as I am aware.

I'm guessing the personal credit margin is the same as "Overdrafts" here in the UK. You can apply for an overdraft where you are allowed to let you balance go negative for a short period and within reason but once you deposit money in it is payed off the overdraft first.

All the best

Andy

By: MISfan

MISfan — Wed, 20 Jun 2007 11:47:36 +0000

This look sound for one debt and on paper but, and you know that a "but" was coming , you should still pay it faster. Why? Because if you want to get a loan for a house, a car … , this will be part of the overall debt(student loan, credit card limits…) you have.

Maybe it's a country thing but when I asked a for "personal credit margin" a few years back, the person made a credit check. Even when I had paid my credit card on time(100% not the minimum) and seldom was at 10-20% of the maximum, they calculated 100% of each card. They calculate that people "could" max them and could fall behind.

"personal credit margin" : It's French-Canadian translation(marge de credit personel) and did not know the English equivalent but it's like a permanent personal loan that if you don't have money in the bank account, it's taken from that. Once the money(your pay) is deposited into the account, it deduct it there first. You don't have bounce check or ask for a small loan
If I would need a major loan, I would have to lower/removed the margin and it won't be a trouble if it's empty unlike a student loan.

This is something to think about because it would follow you until it's fully paid.

My 2cents

P.S.
Is it a "line of credit"?