Case Study - Paying it all back

Yasmine graduates from her 5 year MBBS at Leicester in 2009 (she started the course in September 2004). Her debts are:

Overdraft £2000 Interest free until 2011

Credit card £1000 Interest 12% APR

Professional studies loan £3000 Interest 7% APR

In her first foundation year she receives a basic salary of £21, 862 for working a 40 hour week. Much of the time she works up to 56 hours a week. She also works some antisocial hours. Due to this work she receives a banding supplement of 50% of her salary. Her total salary for the year is £32 793.

After paying her monthly debts, bills, travel and accommodation Yasmine has £772 left to spend.

Yasmine pays off her credit card in 11 months. In total she pays £1058.98 on it.

Over the year Yasmine pays £2400 off her Professional Studies loan.

In her second year Yasmine’s basic pay rises to £27 116. She is also paid 50% banding supplement for working antisocial hours meaning she earns £40 674 over the year.

Yasmine decides to buy a house with a friend. She is able to borrow 3.5 times her annual salary. She also takes out a £5000 graduate loan at 7.9% APR to buy a car to travel to work.

After paying her monthly debts, bills, travel and mortgage Yasmine has £795.54 left to spend.

In four months Yasmine has paid off her Professional Studies loan meaning that her monthly disposable income rises to £995.54. She uses the extra money to make extra payments on her graduate loan, having first checked that her loan had no redemption charges for early repayment. She also manages to clear her overdraft before the interest free period ends.