Student loan repayment

Hi everyone.

Here's my predicament. I have a student loan that is in the region of 12,000 sterling (17,000 euro). I have about 12,000 euro in my current account. I earn about 35,000 per annum. I have no other major out goings. My rent is about 300 euro a months. I would like to be in a position to be able to clear the loan as quick as possible and to start saving for a deposit for a house.

What is my best option. Convert the 12,000 euro to sterling with my credit union and pay that off the loan to kill the compound interest and then pay off the remaining part monthly? Should I open a high interest account like robo direct and put the 12,000 in there and wait for the conversion rate to get stronger and pay the loan in a few months time (I read in the independent that the rate might go up to 0.73 in a few months. It now 0.71).

I now i shouldn't have 12,000 in a current account and I should have started paying off the loan 2 years ago when I started working. But I was young and naive. I was hoping the loan company would forget about me or go bust!

Any suggestions are welcome.

Stoptheclock said:

Convert the 12,000 euro to sterling with my credit union and pay that off the loan to kill the compound interest and then pay off the remaining part monthly?

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If you do this then check out www.XEtrade.com which may give you a much better rate on the exchange.

Should I open a high interest account like robo direct and put the 12,000 in there and wait for the conversion rate to get stronger and pay the loan in a few months time (I read in the independent that the rate might go up to 0.73 in a few months. It now 0.71).

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You are effectively into currency speculation there. Nobody can predict how the markets will fare. I would imagine that reducing your debt to c. €5K would be the most prudent/cost effective approach if you have €12K that is not needed for anything else right now.

Thanks Clubman for the advice. I think I will reduce the loan to 5,000. I'll look into the best way to convet the currany. I'll talk with my credit union first and see what rate they can offer.