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Fairyland

DT:I've been offered a £45k first job. Should I pay off my £55k student loan or buy a house?

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I've been offered a £45k first job. Should I pay off my £55k student loan or buy a house?

 

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This is an extremely interesting case and relevant as the first wave of university fee-payers come out into the workplace with huge debts.

It looks like Mr Wolseley’s expenditure will be almost entirely covered by his loan and other income in his final year, leaving his savings for use later on.

As Mr Wolseley took out the student loan in September 2012, as soon as he earns over £21,000 he will repay at the rate of 9pc of his income over £21,000.

With a salary of £45,000 this should be £2,160 per year or £180 per month. Mortgage lenders don’t typically take student loans into account so this is not a concern.

I would not be concerned about the impact of these repayments on his monthly disposable income.

Although it is tempting to repay the loan all at once, Mr Wolseley is young and as his salary increases he is likely to repay the loan quickly.

Now could be a great time to buy a house: many buyers are nervous after the recent referendum result and there are less people taking the plunge.

Making a bold offer could pay off.

 

First, are Chemical Engineers, graduate starters, paid in the £45 - 48 K range? Second, how quick and how much are salary rises?

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Actually, what is wrong in staying with parents? I don't know the exact tax calculation/saving potential in that salary range but in 5 years time will he save enough to buy a house in cash?

Edited by Fairyland

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Aye, family friend was offered top dollar to work in a de-salination plant abroad. Very good degree IMO esp. with 4 year sandwich/placement Uni courses from the Russel Group Uni's.

Pay and perks rise; More so abroad as they value British Uni education highly.

I would tell him to pay it off as early as possible if he's on the 9k fee deal where his loan interest is probably above 3.5% + and rising.

I'm paying off mine but I went before the absurd IR terms were introduced. My batch has 0.5 IR which is negligible.

Oh, and a big F U to all the grant-given, fee-free, low rent back-in-the-day living MP's who voted for Tuition fees. Pricks.

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15 minutes ago, Fairyland said:

First, are Chemical Engineers, graduate starters, paid in the £45 - 48 K range? Second, how quick and how much are salary rises?

Experienced senior/principal roles are going in the region of £35k-55k from a quick scan of job sites.

Dunno. There are plenty of experienced ones out of work due to the petro-chemical/O&G glut.

Seems rather high... he's not experienced or chartered.... abroad perhaps? (but the Arabs want 10+ years and Professional registration normally)

Smells a bit fishy.

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You never voluntarily pay off more of a student loan than you have to.  Even on his ridiculous salary he isn't going to pay it all off by the time the residue is written off.

 

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" With a salary of £45,000 this should be £2,160 per year or £180 per month. Mortgage lenders don’t typically take student loans into account so this is not a concern. "


WTF not?
It's still debt, and money off your income that you cant use if you have unexpected expenditure. 

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He might be a Chemical Engineering graduate, in fact he could be the most talented chemical engineer of our generation, and could go on to make a revolutionary discovery that will benefit the human race for decades to come.

Only we'll never know, if his £45Kpa starting salary is with a bank.

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Smells of desperate VI propaganda.

I'd be very surprised if it were true.  When you were 1 year from graduiating were you concerned about buiying a house ?

Most people more worried about sh*ging, drinking, exams and other things.

I call B.S. on this one.

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