I’m spending my house deposit savings to pay off my postgrad student loan
Lucy O’Brien was shocked when she discovered how high interest rates were leading to ballooning debt
TL;DR
- The author, a graduate from 2021, is using savings meant for a house deposit to pay off her postgraduate student loan.
- A new 6% interest rate cap is being introduced for some student loans, but most 'plan 2' graduates will still see their rates increase due to inflation linkage.
- The author's initial borrowing of £51,529 has grown to £65,879, with her master's loan balance increasing despite repayments.
- She calculated that continuing monthly payments would take until 2034 to clear her master's loan, costing over £7,000 in interest.
- To avoid further interest accumulation, she made a lump-sum payment and plans to clear her postgraduate loan by 2026.
- This decision delays her property purchase but saves thousands in interest and will boost her salary by removing the monthly deduction.