To repay in full or to wait... share your thoughts please!

So I am now in a position where I can fully repay my student loan without emptying my savings too much, or at least remaining without anything left in my bank account. 

Im half way through it but i really had enough of giving them 600 GBP each month (is not a standard student loan, and i took it in my home country in Europe) 

Also, IR is 4% fixed and has a lot of commissions expenses associated with it

I know that from a finance point of view, as long as i can get more than thatt 4% i shall avoid removing such capital from my savings..however considering the state of the world, that i cant stand those outflows each month and want to go into a bigger house so will need more cash flow, i think that might be the best idea.

 

what do you guys think?

many thanks

Comments (5)

 
Jan 15, 2021 - 9:56am

Given what you've described - I'd pay it off and not have to think about it again. Sure - can you conceivably make more invested? Maybe - but it's basically a 5% hurdle rate (assuming the commissions and fees in there... or close enough), realistically 6% to actually make it worth your while and get some return. People underrate the emotional drag of debt, worrying about it or just there mere inconvenience of having to pay it. 

Kill it and move on. 

 
Jan 15, 2021 - 10:39am

Sadly, I would also consider the political situation in the near future. I know people who can pay their student debt off but are waiting to see if Biden/Democrats will do it for them.

#UnintendedConsequences

Don't know know what the student debt political environment is like in the UK but something to think about.

 
  • Analyst 2 in S&T - Equities
Jan 18, 2021 - 4:22am
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