13 min
Make it Stack #20 - Should you pay off your Student Loan early if you can afford it? Make It Stack
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- Investing
Welcome to "Make it Stack" with Will Waterhouse, the podcast designed to demystify the world of saving and investing for young people.
In this episode, I discuss whether you should pay off your (UK) Student Loan early. Is it worth doing if you have a lump sum?
Topics Discussed/Key Summary:
For a graduate in their mid-twenties with £50k of student debt…
Paying off the student loan early makes most sense if you have a medium/high salary of >£45k AND forecast salary growth to be above inflation over the long term.
Paying off the student loan early makes least sense if you are on a low income with a poor wage growth outlook (below inflation).
Deciding to pay off your student loan early is a complex decision and it hinges on long term factors which can be difficult to predict. A great deal of care should be taken before deciding to “pull the trigger” and pay it off with a lump sum.
Consider the opportunity cost of any spending/investment decision. Choosing to pay off the loan early forgoes the opportunity to invest for the long run (in stocks or real estate). Depending on your individual circumstances, this may not maximise your wealth.
Want to get in contact with me? Use the following channels:
Instagram: @_makeitstack TikTok: MakeItStack Website: https://caytonanalytics.com/ Email: william.waterhouse@cayton-analytics.com
Keep calm and ride the vol.
Disclaimer: This podcast is for educational purposes only and should not be construed as financial advice. If you are unsure of making any investment decision, please contact your financial advisor.
Welcome to "Make it Stack" with Will Waterhouse, the podcast designed to demystify the world of saving and investing for young people.
In this episode, I discuss whether you should pay off your (UK) Student Loan early. Is it worth doing if you have a lump sum?
Topics Discussed/Key Summary:
For a graduate in their mid-twenties with £50k of student debt…
Paying off the student loan early makes most sense if you have a medium/high salary of >£45k AND forecast salary growth to be above inflation over the long term.
Paying off the student loan early makes least sense if you are on a low income with a poor wage growth outlook (below inflation).
Deciding to pay off your student loan early is a complex decision and it hinges on long term factors which can be difficult to predict. A great deal of care should be taken before deciding to “pull the trigger” and pay it off with a lump sum.
Consider the opportunity cost of any spending/investment decision. Choosing to pay off the loan early forgoes the opportunity to invest for the long run (in stocks or real estate). Depending on your individual circumstances, this may not maximise your wealth.
Want to get in contact with me? Use the following channels:
Instagram: @_makeitstack TikTok: MakeItStack Website: https://caytonanalytics.com/ Email: william.waterhouse@cayton-analytics.com
Keep calm and ride the vol.
Disclaimer: This podcast is for educational purposes only and should not be construed as financial advice. If you are unsure of making any investment decision, please contact your financial advisor.
13 min