Martin Lewis

Otherwise, we'd have to talk about the risk that he might lose his job, have a lower salary and therefore not going to be paying it.

I'm going to ignore that for this.

Many people, especially on plan two and plan five, will not clear their loan in full before it wipes, which is an entirely different way of thinking and an entirely different way of behaving.

So don't think that this applies to you if you're in those circumstances.

So on a base level, I have to first assume that Tom does not have any other debts that are more expensive than his student loan.

The Plan 1 student loan is set at the rate of inflation.

So for this year is at 3.2%.

So if you had any other debts like a mortgage or a credit card or a loan that were more expensive than 3.2%,

you would be better off thinking about clearing those ahead of clearing your own student loan.

The second thing I would say is when you're within two years from clearing your student loan, you can have it so that you no longer pay it via the payroll.

You can pay it off via direct debit, which makes things easier because if you pay it via the payroll, it's coming out like tax.

Then what often happens is you keep paying it off once you've cleared it and then you have to get that money back.

So it's important to move it in that way.

So let's get into the specifics.

The first point is you cannot pay the student loan company with a credit card.

The student loan company says it wouldn't be responsible for them to allow a customer to pay off a debt by taking on another debt.

And I think for broad people, especially those who aren't financially savvy, that's absolutely right.

But for those who want to tactically play the system, it may not be right.

If you have no other debt and you can get a 0% card, then using that to pay off your student loan at 3.2% would give you a marginal saving.

and could well be worth doing.