# Repaying UK/NI student debt after relocating to Ireland



## PoundMan (19 Mar 2021)

Hi guys, I am a 32 year old who recently moved from Northern Ireland to the Republic.
I have outstanding student loan debts from my studies at Ulster University when I lived in the North. This requires a monthly repayment of £77 and the debt (currently around £18,000) doesn't get written off for 25 years, so I will have these monthly repayments for another 17 years until April 2038 when I will be approaching 50 years of age.

I looked into the idea of potentially paying it off early, but it would use up about two thirds of my current savings (approx €30,000) and general financial advice seems to be that those savings would be better spent elsewhere since my student loans is such low interest rate of 1.1% 

I am in the process of buying a car, but since I have no credit history here in the South I am likely to have to buy a car outright with cash which will likely cost me in the region of €10,000 for a decent reliable car. I am currently living temporarily with my girlfriends parents but will soon be looking at buying a house here in the South so will have mortgage to consider and a deposit to keep saving for.

If I paid these £77 monthly repayments to the SLC (Student Loans Company) through my KBC current account, they will incur a non-euro transaction fee each time. These aren't big fees but I will have these repayments on a monthly basis for another 17 years (or 204 months) so these costs can add up over time.

I still have a UK current account in the North, so perhaps the best course of action is to pay these repayments from it instead? This would enable me to avoid any non-euro transaction fees, but would require me to use something like Wise (formerly TransferWise) to transfer money from my ROI current account to my NI current account and there is an additional admin fee every time I'd need to do this too. So perhaps additional fees are unavoidable? Perhaps my best bet is to transfer a lump sum once per year to cover me for 12 months of student loan repayments, that way I am only charged an admin fee by Wise once per year instead of doing a transfer each month.

But, I am am also wondering if it would be worth putting up with non-euro transactions fees and paying the student loan back from my Irish bank account in order to help build up a credit history for myself down here rather than kind of hiding these debt repayments in a NI bank account?

I would be interested in getting some opinions and advice on this please.


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## Thirsty (19 Mar 2021)

If it was me, I'd continue the payments from your existing GBP bank account.

I don't think debt repayments to another jurisdiction would in any way help you in terms of a mortgage application.

I'd agree with a lump sum payment into the GBP account once a year or so & then you can forget about it till the following year.

*Provided* you can afford the lump sum payment and you plan to keep the car for 7-8 years, a PCP might work well for you.


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## dereko1969 (19 Mar 2021)

Would it not make sense to get a loan through your existing Northern bank for the car, buy the car up there (probably cheaper) and then re-register it down here?
You could look at Revolut for the monthly payments for your student loan.


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## Thirsty (20 Mar 2021)

Open to correction, but I think you have to have owned the car for six months prior to moving date.


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## cremeegg (20 Mar 2021)

PoundMan said:


> I am in the process of buying a car, but since I have no credit history here in the South I am likely to have to buy a car outright with cash which will likely cost me in the region of €10,000 for a decent reliable car. I




You can easily buy a decent reliable car for less than €2k.


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## PoundMan (20 Mar 2021)

Thirsty said:


> If it was me, I'd continue the payments from your existing GBP bank account.
> 
> I don't think debt repayments to another jurisdiction would in any way help you in terms of a mortgage application.
> 
> ...


Yes I think I will just continue using Wise to transfer money into my UK bank account.
I'd prefer to avoid car finance if at all possible as there are rarely any dealerships offering 0% interest on used cars.



dereko1969 said:


> Would it not make sense to get a loan through your existing Northern bank for the car, buy the car up there (probably cheaper) and then re-register it down here?
> You could look at Revolut for the monthly payments for your student loan.





Thirsty said:


> Open to correction, but I think you have to have owned the car for six months prior to moving date.


Yes unfortunately in hindsight I should have bought a car up North 6 months before I moved down. If I was to buy one up North now and bring it down, I would be charged a fortune in VRT import tax.



cremeegg said:


> You can easily buy a decent reliable car for less than €2k.


That is not what I have found throughout my car search thus far, I have been looking for a used Toyota/Honda under 100,000 miles but most are coming in around €7,000-€10,000. Perhaps you could recommend something or offer further advice on this please?


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## cremeegg (21 Mar 2021)

PoundMan said:


> That is not what I have found throughout my car search thus far, I have been looking for a used Toyota/Honda under 100,000 miles but most are coming in around €7,000-€10,000. Perhaps you could recommend something or offer further advice on this please?


A colleague of mine bought a 2002 Toyota Corrolla 5 years ago for €800, so 13 years old at the time. He commutes 40km a day with it plus whatever weekend driving he does. Before Covid he travelled 180km each way to visit his parents approx once a month and 80km each way once a week to a night course he was doing.


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## Leo (24 Mar 2021)

Given you're looking at purchasing property, at all costs avoid financing a car as that will affect the affordability calculations. When a banks sees car finance, they assume you are likely to buy a new can on finance once the existing loan is paid off.


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## noproblem (24 Mar 2021)

When you go looking for a mortgage you'll have €77 per month less to play with. Pay off a chunk of it, if it was me i'd pay it all off. You'll still have nearly €15k left over and having that bit less money might help you spend less on a reliable car with no debt afterwards. 32 years old, no debt, your own car and €15k in your back pocket. Just because your interest is only just over 1% means nothing to me, it's still a debt and you can well afford to pay it.


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## hfp (24 Mar 2021)

noproblem said:


> When you go looking for a mortgage you'll have €77 per month less to play with. Pay off a chunk of it, if it was me i'd pay it all off. You'll still have nearly €15k left over and having that bit less money might help you spend less on a reliable car with no debt afterwards. 32 years old, no debt, your own car and €15k in your back pocket. Just because your interest is only just over 1% means nothing to me, it's still a debt and you can well afford to pay it.



I think its too soon to decide whether or not to pay off the student loan.

The general advice in the UK is that Student Loan repayments should be regarded as an additional 'Graduate Tax' rather than looking at the overall amount of the debt, as very few students will ever pay off the full amount of their debt just making normal repayments. They are deliberately designed so that only the highest earners will pay them off in full.

If your income and repayment amount remain consistent at its current level, without making any overpayments you would be paying back:
£77 X 17 years X 12 months = £15708, less than you currently owe, so the balance would be written off, meaning that if you pay your loan off in full now, you will have overpaid based on your current repayment amount. Remember as well that interest will be added to the £18000 current balance, which would increase the amount of write-off (just don't ask me to do the maths on that one!!)

If your income increases then the amount you repay will also increase, so if that happens it would be worthwhile then to look at the figures again to see if there would be more benefit to paying off the loan early. Conversely if your income decreases or you are out of work for a period the amount you pay back will reduce.

Similarly there would be no benefit to paying off a chunk of your loan until you know if you are likely to pay it off in full before the write-off date as that won't change the amount of your monthly repayments which is solely based on your income.

In my case it was a no-brainer to pay my student loan off early, but I was lucky enough to be at Uni before the crazy fees were introduced and I only had total debt of around £5000. As my monthly payments were between £50 and £100 per month depending on overtime, I was always going to have to pay it off, but paying it early meant I saved a considerable amount of interest.

I haven't taken out credit in a while, but I believe in the UK lenders only look at the amount of the monthly Student Loan repayment for affordability / net income purposes rather than the overall balance of the loan, so it may be worthwhile checking if different lenders in ROI take different approaches?


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## PoundMan (15 Jun 2022)

Hi guys, I am still looking for some financial advice, having lived in the Republic now for nearly 2 years since moving from Northern Ireland.
Here is my current financial situation:

*Current Annual Salary:*
€45,957 (gross) / €35,140 (net)

*Emergency Savings (3 months net salary):*
€8,787 (Credit Union)

*Regular Savings:*
€31,178.43 (KBC)

*Discretionary Savings:*
€2,719.75 (Revolut)

I am still living rent-free with my girlfriend at her parents home, but I intend to move out as soon as I can find a suitable place that I could afford to rent. I don't really want to spend more than 35% of my net salary on rent, so it is proving very difficult to find anything to rent for under €1000 per month. I know that renting is possibly a waste of money compared to buying, but I don't feel ready to buy at the moment until I feel fully settled in the Republic as I am still at little homesick. I also think I'd be better positioned to avail of first-time buyer assistance from the government after I had paid tax here for 4 years so that might make more financial sense to wait. My girlfriend is currently employed on short-term one year contracts with no guarantees of extension, so it might be wise to hold off on potentially buying until she has established more secured permanent employment. At the moment, the maximum mortgage I could get is €170,733.50 so I would need €18,970.39 for a 10% deposit or €42,683.38 for a 20% deposit.

I have a UK Plan 1 Student Loan (1-1.5% interest rate) with an outstanding balance of £16,665.20. My original loan was for a total of £18,419 and so far I have made total repayments of £4,896 since 2015. I have thought about the idea of paying this off early in one lump sum, as my earnings will most likely see me pay it off before it was due to be written-off in the year 2038 when I would be 49yrs old. But most reports that I’ve read seem to indicate that it is rarely wise to pay off a UK student loan early given that it is really more of a graduate tax where you only pay back whatever you earn. So if I paid it off in full, and then ended up suffering a future loss of income then I will have paid back unnecessarily. They have currently asked me to repay £145 per month for the next 9 months from July 2022 until March 2023. What is the cheapest way for me to do this? I have thought of sending one lump sum (£1,035) via Wise to my existing UK bank account to cover these next 9 months of payments, but I am wondering if there is a better way to do this? Given that Wise charges a fee per each transfer, I thought the best method was to send one lump sum instead of nine monthly transfers.


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## Leo (20 Jun 2022)

PoundMan said:


> Hi guys, I am still looking for some financial advice, ...


You might be best start a new thread with a more suitable title...


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