I made a spreadsheet to see the effect of voluntary payments on a student loan. It's at
https://spreadsheets.google.com/ccc?key=0Avfx9ZW_Ou45dGhuaXg2NS1lc2hCcm9aRWJuN2U4S1E&hl=enI'm not certain it's correct, so disclaimers apply if you want to play with it :D As with all crystal-ball gazing, the further into the future you look the less certain things become.
Some things are very obvious however
- 6.6% compounding interest is vicious, even on a small loan*. If you leave the country and ever plan to pay your loan off hit it as early as possible with as much as possible to mitigate that.
- the $40 annual administration fee that was introduced in the budget also rapidly becomes significant over more than a few years. It doesn't take effect until 2011-2012, but what's a year?
*I recall experiencing a similar feeling when I was playing with mortgage calculators at
Sorted a while back. The "overseas" interest rate is even comparable. Your Student Loan = your career mortgage.
*and didn't it used to be 7%+ for everyone before labour bought the student vote with interest free loans one year? That was before I had one.
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