To pay:
Your days of writing essays the night before they are due may be far behind you, but you still have your Hecs debt right?
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The mean Hecs-Help debt is close to ,500, although it will be much more if you graduated after the government relaxed the cap on fees a few years ago.
Compulsory repayments don't kick in until your earnings reaches close to ,000, and even then they only start at just 4 per cent of your yearly income. If you're on a wage of ,000, about a week will be taken out of your pay.
So should you pay it off more quickly?
There is one for real big incentive to pay Hecs-Help off fast: the government gives you a allowance of 10 per cent if you pay your loan off early, so you should for real reconsider it if you have the money. Any kind of allowance is always a bonus.
Long-term returns from the stock market are historically colse to 10 per cent. But these are not guaranteed. If you pay off your uni debt, that's an immediate 10 per cent recovery on any money you pay off. Not a bad deal.
Or not to pay:
On the other hand, if you don't have enough cash to pay off a large chunk of your debt in one hit, it is probably more worthwhile putting what tiny savings you've got into a regular investing plan.
After all, Hecs-Help attracts no interest, and only goes up agreeing to inflation each year. Unlike other debts, there is no pressure to get rid of Hecs-Help debt fast since it isn't costing you anyone and you're paying it off on a regular basis.
You should never borrow money to pay off your Hecs-Help debt - that will only put you in a worse place financially. Splurging your savings is a bad idea too because that money can be put to better use. If you've racked up other debts since graduating, such as a hefty prestige card bill then pay these off before you mental about paying off your Hecs. always pay off the debts that are costing you the most first and foremost.
These are the pros and cons for paying or not paying - now it's up to you!
To Pay Or Not to Pay Your Hecs (Help) Debt Free Debt Help
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