Is it worth paying off my masters loan or investing in a fund with my savings?

07 January 2022

Question by lucy

Hi I have the maximum masters loan, which I understand is 6% interest. I am trying to save money now in my current job. Is it worth paying off the masters loan first or investing in a fund with my savings? Is it worth saving at all?


Answered by Boring Money

Hi Lucy,

Thank you for your question.

Tricky one this:

It's always great to save money and keeping 3-6 months worth of outgoings aside for emergencies is sensible.

However, at a 6% interest rate it is certainly worth paying some attention to the loan. From a purely practical view, you would need to be making 6% pa on your savings/investments to make that route worthwhile. Banks don't offer 6% and even with investments this return wouldn't be guaranteed.

Hopefully that information helps.

Many thanks

Oliver

Answered by

Boring Money