duncanspilaweller

Hi All,

I have been trawling the forums for answers on how people have paid their UK student loans once they have landed in Canada.

I have been on the Student Loan Co. website and read the conditions etc, and got the forms needed to send them once employed, but i was just curious as to how anyone who has an outstanding loan makes the payments back to the UK.

As many others may have experienced, the Loans Co. aren't the easiest people to get hold of and always seem to try and transfer me, or call me back, but end up cutting me off or not bothering. So i thought I'd try the knowledgeable folk on here (you seem to know most stuff!)

I have seen talk on here of paying through paypal, as the fees are less than an international money transfer, but not read of anyone actually doing this.

So if anyone can shed some light on the subject for me that would be brilliant. How do you pay? how often? how much?

Thanks for your time,

Dunc

I land next week........ARRRGGGHHHH!

lucieg

I've done it through paypal, I have 2 logins one using my google email (linked to my canadian bank account) and one using my hotmail email (linked to my UK bank account) and every couple of months I transfer enough to make a few months worth of payments. As I was transferring fairly small payments regularly the paypal thing worked out cheaper (for me) and it's also really quick, paypal to paypal account is instant and then the transfer to my UK bank account takes a couple of days.

I prefer doing it this way than going into my bank as I like doing everything online...I'm lazy ;-)

duncanspilaweller

Thanks lucieg,

that seems like a good way to do it. I think i will do the same when i get to canada and link it to my account there.

Do the loan company still just take a small amount of each paycheck as normal?

Thanks again,
Duncan

lucieg

You'll have to send of proof of what you're earning, when I first came over and was only temping I just sent copies of my meagre payslips and proof of my savings to show that's what I was living off and I didn't have to pay anything for the year, second time round I had a proper job so I waited until I had 3 months worth of payslips sent in the forms they assessed me and told me how much I had to send them every month and I set up a direct debit from my UK account.

I just had to do a re-assessment for this year and the amount I have to pay has gone up by 20 quid a month, I'm not earning anything extra but I think the amount you're allowed to earn has gone down. I.e. in the UK you can earn 15k before you start paying back, if you're in Canada you can only earn the equivalent of 12k GBP before you have to pay back...and the exchange rate is a killer at the mo.

duncanspilaweller

thats brilliant lucieg,

i have got more sense out of you in two forum posts than i have in two weeks of phone calls and emails to the loan company!

I'll get it all sorted ASAP when i land. I have paid off about £25 of my loan and i graduated in 2005. prob best i start now.

Dunc

Flyingscottie

Oh god, I don't even want to start thinking about this.... I imagine it will never be straightforward!!

Never heard of the paypal thing, interesting! How much does PP charge? I assume then you have to keep a UK bank account?

wizzard

The Student Loans Company now has online accounts that allow you to pay online. You can log on and pay using a UK account/debit etc. but you can also pay using a credit card. There is a small service charge and you have whatever your credit card charges for exchange rate but it is way simpler than before that when I had to mail sterling money orders to them. You can also now set up a standing charge to a credit card so now it just charges my credit card the allocated amount each month so I don't have to worry about forgetting.
Each year you send in proof of income and they evaluate how much you have to pay each month for the next year. The threshold is around £11,000 last time I looked then they charge something like 9% of anything you earn above that each year divided into 12 payments. So it depends on what you earn really and how much you owe.
If you fail to return the info then they move you to their fixed monthly payment plan which is something stupid like £200/month so not a good idea to ignore it. I forgot to pay one month and got a letter from them fairly sharpish asking me to call them and sort it out befire they refer it to a debt collection agency so they don't hang about.

adele

Ditto for me. I'm currently paying by D/D from my UK bank account, but when the money in there runs out then I'll be making payments using my Canadian credit card as even with the fee it'll be cheaper (and easier) than transferring money from Canadian account to UK account.

HTH

Adele

lucieg

I forget what it is now, I haven't actually done it in about 6 months as I had a lump sum go into my UK account so haven't needed to transfer, from what I remember the fee was a pound or something the main expense with that the exchange rate won't necessarily be as good as if you used say hifx but because I was transferring such small amounts it was better for me to do it the paypal way.

Alan2005

Eh? If you are earning CAD then the exchange rate is doing you a huge favour - your debt is 25% less than it was 18mos or so ago.

duncanspilaweller

yeah i thought that, but at first i wont be able to afford to pay off a bank loan as the interest rate is so much higher on a bank loan than the student loan co.

would be nice to be able to get a loan in canada and clear the lot, and then pay it back in canada but dont think i will be able to.

Dunc

lucieg

Not really...put it this way if I earn $60,000 a year, a couple of years ago when it was $2 that was the equivalent of 30,000 GBP therefore I was paying back the loan on 18,000 GBP worth.

Now my $60,000 a year is the equivalent of 39,000 GBP therefore I'm paying back the loan on 27,000 GBP worth but my situation hasn't changed, my outgoings are still the same it's not like I've got all this extra money.

I'm not paying them using my Canadian earnings as I have money in my UK account to handle that, there's no point paying the transfer fees and all the additional hassle.

Also and don't quote me on this butI think they lowered the amount you can earn from the equivalent of 15,000 GBP to 12,000 GBP which also ups the amount you have to pay back. Apparently our lifestyle is a lot cheaper out here than in the UK....although that's debatable given how much groceries cost!

I do get your point though that if I could pay the whole thing off in one lump sum the debt is smaller, but I can't so it means nothing to me other than my monthly payments have gone up and my salary has stayed the same.

Alan2005

But your debt is being decreased more quickly. It might not feel like it right now, but in the long run this is going to save your money. Though I can see it's tough if your cash flow is pretty much accounted for each month.

lucieg

Oh I know that but currently paying off my student loan is not my priority, the loan is a long term debt that has a very low interest rate (zero at the moment) that right now I'm just paying off little by litte each month and will continue to do so for the next 6 years or so. The only chance I'd pay it off is if I come into a lump sum and even then it would be better being put towards paying off a mortgage as the interest rates on that debt will be higher (unless inflation in the UK goes nuts)

Therefore my main concern right now is how does this impact me month to month, and from this point of view the exchange rate is not doing me any favours.

Alan2005

Yes, but with foreign denominated debt, you don't just have to worry about interest rates, you have the exchange rate to consider. If the exchange rate goes back up your debt is larger - and it will take more dollars to pay it off. You may consider this long term debt; but holding any significant amount of debt in a currency you don't earn over the long term is risky. Ask those icelanders with euro mortgages about how risky it is.

To use your mortgage as an example, you think the interest rate on your mortgage is higher and so you are paying that off first. However should the exchange rate go from 1.54 to 1.70 over the next 6 months (which is not that unlikely) - in CAD terms (which you earn) this is equivalent to seeing your debt increase at an annualized interest rate of over 20%.

To be honest, in your position I'd be doing the maths and possibly getting a loan in CAD to pay off the GBP debt while GBP is weak.