Hey Guys, I was just wondering if anyone out here would be able to help out in both some info and opinions.
Q's:
1). If I want to make a voluntary contribution to my HECS repayment, how do I go about doing it?
2). Is interest charged on outstanding HECS debt applied at the end of the calendar year, in increments as the year goes along?
This is my thought. Although the consensus is generally don't pay off HECS as you can do better things with the money/borrow less money in a mortgage at a higher rate etc, recently I have been considering my own position.
Personally I'm making the call that the economy is going to s**t and inflation will ramp up over the coming years. So instead of investing, or keeping my money in cash, I am considering paying off the only debt I have, that being in HECS. I figure, that as long as the answer to my second question is yearly, then I can go about making this repayment as a lump sum at the end of next financial year at a fairly large 'discount'.
* 10% discount on voluntary contribution.
* save 4% on inflation being indexed for that year.
* make 3% on interest over the year (as an average of it as the contributions come in. I will be putting in a lump sum to begin with and I will have several months to spare once I have the amount needed)
*roughly 10% of the total debt will be returned to me as a PAYG return on wiping the debt out in June.
So that would add up to about a 27% discount on the total value, and from then on I will get more money in my salary.
I know that the terms of my HECS debt are more generous than any real debt, but looking at the above, the terms of repayment are also fairly generous. I figure I might take advantage of that over the coming year, but was wanting to hear others opinions.
So please share them
Q's:
1). If I want to make a voluntary contribution to my HECS repayment, how do I go about doing it?
2). Is interest charged on outstanding HECS debt applied at the end of the calendar year, in increments as the year goes along?
This is my thought. Although the consensus is generally don't pay off HECS as you can do better things with the money/borrow less money in a mortgage at a higher rate etc, recently I have been considering my own position.
Personally I'm making the call that the economy is going to s**t and inflation will ramp up over the coming years. So instead of investing, or keeping my money in cash, I am considering paying off the only debt I have, that being in HECS. I figure, that as long as the answer to my second question is yearly, then I can go about making this repayment as a lump sum at the end of next financial year at a fairly large 'discount'.
* 10% discount on voluntary contribution.
* save 4% on inflation being indexed for that year.
* make 3% on interest over the year (as an average of it as the contributions come in. I will be putting in a lump sum to begin with and I will have several months to spare once I have the amount needed)
*roughly 10% of the total debt will be returned to me as a PAYG return on wiping the debt out in June.
So that would add up to about a 27% discount on the total value, and from then on I will get more money in my salary.
I know that the terms of my HECS debt are more generous than any real debt, but looking at the above, the terms of repayment are also fairly generous. I figure I might take advantage of that over the coming year, but was wanting to hear others opinions.
So please share them