Comments on: Voluntary Contributions to HECS Debt http://www.savingsguide.com.au/voluntary-contributions-to-hecs-debt/ How to save money on everything! Credit cards, home loans, spending, shopping and more. 100% FREE! Tue, 07 Feb 2012 13:07:37 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Sam http://www.savingsguide.com.au/voluntary-contributions-to-hecs-debt/comment-page-1/#comment-13571 Sam Sun, 08 May 2011 23:37:13 +0000 http://www.savingsguide.com.au/voluntary-contributions-to-hecs-debt/#comment-13571 Thanks Scott for pointing out the various factors in paying of a HECS....very helpful. Thanks Scott for pointing out the various factors in paying of a HECS….very helpful.

]]> By: Scott http://www.savingsguide.com.au/voluntary-contributions-to-hecs-debt/comment-page-1/#comment-3450 Scott Wed, 11 Nov 2009 02:40:08 +0000 http://www.savingsguide.com.au/voluntary-contributions-to-hecs-debt/#comment-3450 Hey Alex, You have to weigh up your options carefully when paying voluntary HECS debt payments. It is complex and different for everyone depending on your situation. If you pay it off early you get a 10% discount on the whole amount (or any amount over $500) and you save the inflation (interest) added to the amount of the term of the loan. It also means that you have less money in your pocket at the end of the day. HECS debt doesn't go up with interest as such it goes up with inflation. So in a perfect world your wages should go up by roughly the same percentage as your HECS debt so in 10 years it will still be the same amount in that days dollar terms. For alot of people I'm sure they will get satisfaction about not having the debt. I think what you have forgotten to factor in is that if you SAVED $2000 a year and invested it you would also get interest on that amount meaning the 'saving' of 'interest' from paying it off $2000 a year would be far less (but you would get the 10% saving on each amount you pay). There is a lot of people (in media) that say that keeping your HECS debt for as long as you can is the best option as it will be the cheapest debt you'll probably ever get. I believe this is true to a certain degree. There is definately advantages to paying off the debt with a voluntary payment in the last year of payments as you would have paid it off with your wage either way and you'll receive a 10% discount on the final amount owing (through your tax return). The other advantage of not paying your HECS off now is the extra money you will have incase you lose your job etc. If you lose your job after 3 years you will have $6000 less in your bank account. You won't have to pay off your HECS at the time but you wont be able to access that money again. Personally I have about 2 years left of compulsary payments left through my wage so I'm just going to pay it off because I have the cash now sitting in the bank and I'll get the 10% discount. I just thought I'd point out a few things I didn't get out of your article so others can be informed. Thanks, Scott Hey Alex,

You have to weigh up your options carefully when paying voluntary HECS debt payments.

It is complex and different for everyone depending on your situation.

If you pay it off early you get a 10% discount on the whole amount (or any amount over $500) and you save the inflation (interest) added to the amount of the term of the loan. It also means that you have less money in your pocket at the end of the day.

HECS debt doesn’t go up with interest as such it goes up with inflation. So in a perfect world your wages should go up by roughly the same percentage as your HECS debt so in 10 years it will still be the same amount in that days dollar terms.

For alot of people I’m sure they will get satisfaction about not having the debt.

I think what you have forgotten to factor in is that if you SAVED $2000 a year and invested it you would also get interest on that amount meaning the ‘saving’ of ‘interest’ from paying it off $2000 a year would be far less (but you would get the 10% saving on each amount you pay).

There is a lot of people (in media) that say that keeping your HECS debt for as long as you can is the best option as it will be the cheapest debt you’ll probably ever get. I believe this is true to a certain degree.

There is definately advantages to paying off the debt with a voluntary payment in the last year of payments as you would have paid it off with your wage either way and you’ll receive a 10% discount on the final amount owing (through your tax return).

The other advantage of not paying your HECS off now is the extra money you will have incase you lose your job etc. If you lose your job after 3 years you will have $6000 less in your bank account. You won’t have to pay off your HECS at the time but you wont be able to access that money again.

Personally I have about 2 years left of compulsary payments left through my wage so I’m just going to pay it off because I have the cash now sitting in the bank and I’ll get the 10% discount.

I just thought I’d point out a few things I didn’t get out of your article so others can be informed.

Thanks,

Scott

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