STSL debts are interest free loans. So unlike credit cards or other loans you don’t get charged interest on the balance every month. However, the total amount of your STSL debt is indexed every year on 1 June to maintain the balance of the loan in today’s real value.

Without going into too much detail, this simply means that in line with the rising costs of other products and services (also known as the CPI or Consumer Price Index) the real value of the loan amount also needs to increase over time. Just keep in mind that although the balance of your loan is going to increase each year, the amount you have to repay is calculated on your taxable income for the year.

As the balance increases, it will most likely mean it will take you longer to repay the loan balance so repaying more than the minimum amount will help to pay off this debt sooner and help avoid the impact of indexation.