Forum

Critical Illness payment and student loans/Mortgages

Ok, I’m really not complaining!!! The critical illness cover I had actually paid out. (I never thought it would) Does anyone know if I will need to pay off my student loan with the payment. If I put it in my mortgage would this stop me from being able to move house if the lender knows I have a MS. Thanks

As far as I know with the student loans company if you are not earning enough to pay it then they don’t take anything from you and if this continues beyond a certain age it is written off. That will depend on when you went to uni though if it was post 1998 then this is certainly the case. The fact you have MS shouldn’t be a factor of applying for another mortgage in my opinion, they will ask for your salary details and if it is affordable and you pass the credit check then it shoudl be fine. Also paying off some of the mortgage will stand you in good stead for a new mortgage won’t it because the LTV will be lower as you will have more equity in the current property. I’m not an expert on this though so I may well be wrong Ruth

My student loan is for years 1997-2001. Your right if you don’t earn enough you don’t pay back and I’m well below threshold. I’m actually thinking of the form now and I think I will need to just declare income from savings. I might put some in my mortgage and some in investments. I know it’s a great problem to have but it’s just such a lot to me that its actually freaking me out thinking what to do with it!!!

From what you are saying, you may have cover over and above your outstanding mortgage amount? You should probably consider getting some financial advice if that’s the case…I cannot give you advice

BUT I would say it would be very unusual for a licenced financial adviser to recommend you invested some of an insurance payout like this, as opposed to repaying a debt i.e. your mortgage loan. Think about this, if you invested it, could you guarantee it would do better than what you’d paid out on interest on your outstanding mortgage?? Maybe someone at your bank could help you?

Going anon, as I don’t want my comments misconstrued, but think very carefully and try to remember WHY you took out the policy in the first instance, was it for the same amount as your mortgage? x

Glad you got your payout (I’m still waiting for mine!). I would pay your mortgage as priority if you can, no idea re the student loan I’m afraid though.

Hey there! Congrats on the payout :slight_smile:

I work for a bank in a financial difficulties team and see a lot of guys getting payouts for miselling of PPI. First off they don’t HAVE to use this money to do anything, even if they’re in arrears on a debt to the bank, that lump sum is their money. Your insurance payout is yours, if you hadn’t paid premiums, you wouldn’t have it.

And as far as I know, if you pay off a lump sum off the mortgage, you’re not obliged to tell the mortgage company WHERE the money has come from. Especially as you’re likely to just be transferring it from a standard bank account or wherever your money is paid into. They’re really not likely to ask any questions at all about the details of a payment coming from a reputable insurance company, more likely to ask questions if your payout comes as a stash of ten pound notes. Besides what right have they to know WHAT you recieved your payout for?

As everyone’s said, check out the situation with the student loans company, you shouldn’t have to use it all to pay off the loan, your money remember? You may however need to pay a proportion to the loan IF an insurance payout is classed in your annual income, AND this takes you over the £21,000 income bracket.

As to what else to do with the money, speak to a financial advisor as it’ll depend entirely on your needs.

You may need a stash of easily accessible cash for emergencies if you haven’t got any already. (A few months worth of income just incase the worst happens?)

You may need something invested for your retirement. (Holidays on the costa?)

You may want to pay off the mortgage? (Remember, base rate is very low right now, it could be a good time to clear off as much as you can before rates rise again.)

Talk to an advisor hon, not us numpties on the forum.

Much love :slight_smile:

Hey there! Congrats on the payout :slight_smile:

I work for a bank in a financial difficulties team and see a lot of guys getting payouts for miselling of PPI. First off they don’t HAVE to use this money to do anything, even if they’re in arrears on a debt to the bank, that lump sum is their money. Your insurance payout is yours, if you hadn’t paid premiums, you wouldn’t have it.

And as far as I know, if you pay off a lump sum off the mortgage, you’re not obliged to tell the mortgage company WHERE the money has come from. Especially as you’re likely to just be transferring it from a standard bank account or wherever your money is paid into. They’re really not likely to ask any questions at all about the details of a payment coming from a reputable insurance company, more likely to ask questions if your payout comes as a stash of ten pound notes. Besides what right have they to know WHAT you recieved your payout for?

As everyone’s said, check out the situation with the student loans company, you shouldn’t have to use it all to pay off the loan, your money remember? You may however need to pay a proportion to the loan IF an insurance payout is classed in your annual income, AND this takes you over the £21,000 income bracket.

As to what else to do with the money, speak to a financial advisor as it’ll depend entirely on your needs.

You may need a stash of easily accessible cash for emergencies if you haven’t got any already. (A few months worth of income just incase the worst happens?)

You may need something invested for your retirement. (Holidays on the costa?)

You may want to pay off the mortgage? (Remember, base rate is very low right now, it could be a good time to clear off as much as you can before rates rise again.)

Talk to an advisor hon, not us numpties on the forum.

Much love :slight_smile: