What to do with student loan? Help

[dan_almond]

Im after a few opinions with what to do with my student loan this year. Ive spent the last 2 loans in strip clubs, plenty of booze, girls and food. Im desperate to do the same this year, but due to the fact im likely to get a job outside of commuting distance, i need to be wise with my money...

Now the below figures are rough, based on a couple of days working, small rent costs due to living at home, and from October to June say.

Total income during this period will be roughly £1000 month, for 8 months say. Im self employed also, so tax will be low. I have a fabia vrs, which looks after me fuel wise...

If we say, my bills be total £400 a month, im left with approx £600 a month.

Am i best to pile the lot into premium bonds say, and let them acumilate. Ill need as much as possable for a deposit/rent when i do leave uni.

The value of my car is approx £5000. Apart from the regular income, im tempted to sell it, stash the £5k into premium bonds, and get a car on finance for £200 a month. That way i free up £5k for the premium bonds to do their magic.

Im short, ill have £600 a month (for 8 months) to invest, plus (possably) a £5k car...

Any advice on what i should do with it. Any advice on getting rid of the car, and what new car to replace it with? I need to be savvy during this period

[Maxf]

You havent got a cat's chance in hell of your bonds making you more than the 7-9% your finance will cost.

[matthewg]

dan_almond said:

Im after a few opinions with what to do with my student loan this year. Ive spent the last 2 loans in strip clubs, plenty of booze, girls and food. Im desperate to do the same this year, but due to the fact im likely to get a job outside of commuting distance, i need to be wise with my money...

Now the below figures are rough, based on a couple of days working, small rent costs due to living at home, and from October to June say.

Total income during this period will be roughly £1000 month, for 8 months say. Im self employed also, so tax will be low. I have a fabia vrs, which looks after me fuel wise...

If we say, my bills be total £400 a month, im left with approx £600 a month.

Am i best to pile the lot into premium bonds say, and let them acumilate. Ill need as much as possable for a deposit/rent when i do leave uni.

The value of my car is approx £5000. Apart from the regular income, im tempted to sell it, stash the £5k into premium bonds, and get a car on finance for £200 a month. That way i free up £5k for the premium bonds to do their magic.

Im short, ill have £600 a month (for 8 months) to invest, plus (possably) a £5k car...

Any advice on what i should do with it. Any advice on getting rid of the car, and what new car to replace it with? I need to be savvy during this period

Stocks and Shares ISA?

Any ISA supposed to be a good bet at these <10k amounts.

[dan_almond]

Maxf said:

You havent got a cat's chance in hell of your bonds making you more than the 7-9% your finance will cost.

Im not saying ill make more than the interest of finance, but i want to make the sensible move, and not blow the lot on the blone we spent so much time money on

[dan_almond]

matthewg said:

dan_almond said:

Im after a few opinions with what to do with my student loan this year. Ive spent the last 2 loans in strip clubs, plenty of booze, girls and food. Im desperate to do the same this year, but due to the fact im likely to get a job outside of commuting distance, i need to be wise with my money...

Now the below figures are rough, based on a couple of days working, small rent costs due to living at home, and from October to June say.

Total income during this period will be roughly £1000 month, for 8 months say. Im self employed also, so tax will be low. I have a fabia vrs, which looks after me fuel wise...

If we say, my bills be total £400 a month, im left with approx £600 a month.

Am i best to pile the lot into premium bonds say, and let them acumilate. Ill need as much as possable for a deposit/rent when i do leave uni.

The value of my car is approx £5000. Apart from the regular income, im tempted to sell it, stash the £5k into premium bonds, and get a car on finance for £200 a month. That way i free up £5k for the premium bonds to do their magic.

Im short, ill have £600 a month (for 8 months) to invest, plus (possably) a £5k car...

Any advice on what i should do with it. Any advice on getting rid of the car, and what new car to replace it with? I need to be savvy during this period

Stocks and Shares ISA?

Any ISA supposed to be a good bet at these <10k amounts.

Ill look into that now. I have a cash ISA currently, but never heard of the stocks and shares ISA.

[Austin.J]

Pretty sure you're the first student actually asking what to do with the loan.

Go mental & have fun, only time you get to do it!

[Maxf]

dan_almond said:

Maxf said:

You havent got a cat's chance in hell of your bonds making you more than the 7-9% your finance will cost.

Im not saying ill make more than the interest of finance, but i want to make the sensible move, and not blow the lot on the blone we spent so much time money on

I don't follow you. You've got a £5k car and are thinking of selling it to get a 1.5% return with P.bonds, but to do so will cost you 7% interest on the finance (minimum). You will be eroding your capital. Unless I'm missing something really obvious (which isnt unheard of).

[robuk]

Its a loan.

You have to pay it back.

Remember that ;-)

[Eric Mc]

Time to scrap student loans.

[dan_almond]

Maxf said:

dan_almond said:

Maxf said:

You havent got a cat's chance in hell of your bonds making you more than the 7-9% your finance will cost.

Im not saying ill make more than the interest of finance, but i want to make the sensible move, and not blow the lot on the blone we spent so much time money on

I don't follow you. You've got a £5k car and are thinking of selling it to get a 1.5% return with P.bonds, but to do so will cost you 7% interest on the finance (minimum). You will be eroding your capital. Unless I'm missing something really obvious (which isnt unheard of).

What would you advise?

[I Love Lamp]

So you want to invest money and earn (a very VERY optimistic) 5%, whilst borrowing money and paying (again, optimistic on the low value loan amount) 8%?

Edited by I Love Lamp on Friday 24th September 13:01

[Eric Mc]

I Love Lamp said:

So you want to invest money and earn (a very VERY optimistic) 5%, whilst borrowing money and paying (again, optimistic on the low value loan amount) 8%?

Edited by I Love Lamp on Friday 24th September 13:01

I hope he isn't studying economics.

[matthewg]

I Love Lamp said:

So you want to invest money and earn (a very VERY optimistic) 5%, whilst borrowing money and paying (again, optimistic on the low value loan amount) 8%?

Edited by I Love Lamp on Friday 24th September 13:01

student loan rates are very very low. But im sure he would be better not to borrow anything.

[jagracer]

Eric Mc said:

Time to scrap student loans.

With people like this being eligible for them I 100% agree

dan_almond said:

Maxf said:

dan_almond said:

Maxf said:

You havent got a cat's chance in hell of your bonds making you more than the 7-9% your finance will cost.

Im not saying ill make more than the interest of finance, but i want to make the sensible move, and not blow the lot on the blone we spent so much time money on

I don't follow you. You've got a £5k car and are thinking of selling it to get a 1.5% return with P.bonds, but to do so will cost you 7% interest on the finance (minimum). You will be eroding your capital. Unless I'm missing something really obvious (which isnt unheard of).

What would you advise?

If you can afford to blow it on strip clubs and booze you don't need it and should have more brains than to borrow it in the first place, forget the bit about brains, you're at uni so you wouldn't have any.

[I Love Lamp]

matthewg said:

I Love Lamp said:

So you want to invest money and earn (a very VERY optimistic) 5%, whilst borrowing money and paying (again, optimistic on the low value loan amount) 8%?

Edited by I Love Lamp on Friday 24th September 13:01

student loan rates are very very low. But im sure he would be better not to borrow anything.

Nope. He wants to sell his VRS and buy another car on finance (£200 per month). Finance, I assume, will come from a bank or a car dealership. I'm out of touch with loan rates , though I assume 8% would be a good rate for a small loan. From a car dealership, more than likely 12%.

So on top of what I previously said, add in the initial student loan % interest (as I forgot about it!)

OP. Take the student loan, stick it all in an ISA. Your interest rate in the ISA will offset the cost of the borrowings (probably +3%).

Earn the rest of your money by getting a job? Or just blow it on hookers and coke.

Edited by I Love Lamp on Friday 24th September 14:34

[nomisesor]

Eric Mc said:

I Love Lamp said:

So you want to invest money and earn (a very VERY optimistic) 5%, whilst borrowing money and paying (again, optimistic on the low value loan amount) 8%?

Edited by I Love Lamp on Friday 24th September 13:01

I hope he isn't studying economics.

He's following Gordon Brown economics - borrow and 'invest' (spend), don't worry about the repayments...

OP (if not a Daily Mail troll) not the best advert for public subsidy of students.

Edited by nomisesor on Friday 24th September 21:41

[jagracer]

I Love Lamp said:

OP. Take the student loan, stick it all in an ISA. Your interest rate in the ISA will offset the cost of the borrowings (probably +3%).

What world is that in then? Student loan will be at least 4% PA, best ISA I can find is 2.75% for one year then it goes back to .5% Most of the people my daughter knows who have started repaying their loans recently are finding that their sum increases each year as the interest is far higher than what they are repaying.

[y282]

if you don't need it, don't take it out. you're paying for the money for the sake of having it!

[I Love Lamp]

jagracer said:

I Love Lamp said:

OP. Take the student loan, stick it all in an ISA. Your interest rate in the ISA will offset the cost of the borrowings (probably +3%).

What world is that in then? Student loan will be at least 4% PA, best ISA I can find is 2.75% for one year then it goes back to .5% Most of the people my daughter knows who have started repaying their loans recently are finding that their sum increases each year as the interest is far higher than what they are repaying.

Apologies, I was under the impression a student loan was around 1.5% - I have no personal experience on Student loans, therefore admit this was based on assumption.

Contrary to my suggestion what to do, it makes the original plan OP has suggested far worse!

P.S. ICICI have a fixed contract ISA at 4.75%.

[T84]

Is this a windup? What an utter waste of money that is SUPPOSED to be there so people can get educated.

FFS.