20k in Student Debt/30k in Bank

[sze5003]

Mines at 6.5 but I can't afford to pay more than standard monthly amount with rent, insurance, car payment, and 4 other school loans. I would pay as much as you can off now.

 

[Doppel]

Not knowing the interest rate on money you've borrowed really is terrible, please find that out 🙁

 

[Wreckem]

If your loans are federal student loans issued before July 2006. Sit on them and pay them off on schedule.

If your loans are federal student loans issued August 2006-July 2009. Pay them all off ASAP.

If your loans are federal student loans issued August 2009-Present. It depends on what your consolidated interest rate is, but its likely above 3.5%, so I would pay them all off.

 

[twinrider1]

Put $10,000 on black.

 

[Sho'Nuff]

I got 20k in student debt left. I have 30k in the bank. No car debt or mortgage.

Should I pay off the entire 20k immediately or should I pay month to month for the next 3 years?

Apart from your interest rate, what are your expenses? You should have some liquid capital in reserve. 10K is enough for some, but not for all.

 

[Corporate Thug]

Student loan rate is usually ridiculously low.

I have 7K left over, I was tempted to just pay it off since it's annoying. I called up and the rate was 2.7%~ LOL.

That's LESS than the inflation.

my federal loans are at 6.125%

Private ranges from 3.25-4%

 

[gorcorps]

Mine is at 6.5% 🙁 Sucks. I'm paying it off as fast as I can while still leaving a little bit in the bank. Aiming to be done by Christmas.

Mines at 6.5 but I can't afford to pay more than standard monthly amount with rent, insurance, car payment, and 4 other school loans. I would pay as much as you can off now.

Same rate here... we got suckered on a the federal loans but couldn't do anything about that. Anyway, I'm personally paying a touch more than what my standard repayment value is but it's still a long way off. The sad thing is it's all from grad school. I didn't owe a dime for undergrad, but I graduated in '09 and couldn't easily find a job so stayed in school. 30k later and I'm still not sure it was a wise choice, but what's done is done.

 

[yottabit]

I will be graduating with approximately ~30k in debt. I have a small amount at high rates 6% to 9(!)%, and some at rates of 2-4%. I plan on paying off the high rate loans as fast as possible and then sitting on the remaining low rate loans, with the intent of being able to buy a house quicker at a 20% down payment.

 

[Sloper]

Aside from the numbers, consider the emotional impact for paying it off. Some people feel the monthly payments as undesired external pressure and these people are happier without any debt.

 

[mikegg]

Interest rates are at slightly above 3%, 4%, 5% - 3 different loans.

I think I will definitely pay off the 5% first. Might keep the 3% on a month to month basis.

 

[SparkyJJO]

Aside from the numbers, consider the emotional impact for paying it off. Some people feel the monthly payments as undesired external pressure and these people are happier without any debt.

This for sure. One less thing for me to worry about or deal with. Even if the interest rate was only 2% I'd still be pushing to get rid of it at this point. I'm tired of debt and this last student loan is the only debt I have left. It will also be that much more money per month I'm not spending and can put it away towards something else. Or pay my increased health insurance rates thanks to obamacare 🙄

 

[TuxDave]

Aside from the numbers, consider the emotional impact for paying it off. Some people feel the monthly payments as undesired external pressure and these people are happier without any debt.

There's that but I still wouldn't pay it off, I'm still paying mine at 2%. I don't know how much money you make but you are going to drop your liquid assets to $10k. Are you going to have enough safety net to make your Roth IRA contributions? Sometimes you got to just put emotion aside and work with math.

Oh and yeah 5% may be worth getting rid of. I agree.

 

[Vic Vega]

Not a fan of going down to zero or near zero on savings.

I would continue to pay monthly and at the same time be paying myself an extra amount into secondary savings until I had enough to pay it off without touching my primary savings

 

[SparkyJJO]

There's that but I still wouldn't pay it off, I'm still paying mine at 2%. I don't know how much money you make but you are going to drop your liquid assets to $10k. Are you going to have enough safety net to make your Roth IRA contributions? Sometimes you got to just put emotion aside and work with math.

Oh and yeah 5% may be worth getting rid of. I agree.

I don't have a roth, but I can't think of the last time I had $10k in the bank, ever, let alone $30k.

If I had $30k in the bank and $20k in loans, and my monthly bills and stuff were where they are currently, I'd be down to $10k in the bank and debt free in a heartbeat.

 

[JM Aggie08]

No. If interest rates are low, keep up with the monthly payments. Better to have a sizeable safety net just in case. What's 3 more years anyway?

The more liquidity you have, the better.

 

[Train]

I'd pay it off... forget the "OMG, you're 0.038% below inflation!" crap. You don't even know the interest rate going in... you're probably not going to pay attention to it close enough to notice when it goes back up, as most subsidised loans are variable rate. And if it serviced by a company like Sallie Mae, they are going to try every shitty tactic to get you in fees or extend the life of your loan. Just pay it off.

 

[sunzt]

don't forget benefits of student loan deductions on taxes

 

[Wreckem]

I'd pay it off... forget the "OMG, you're 0.038% below inflation!" crap. You don't even know the interest rate going in... you're probably not going to pay attention to it close enough to notice when it goes back up, as most subsidised loans are variable rate. And if it serviced by a company like Sallie Mae, they are going to try every shitty tactic to get you in fees or extend the life of your loan. Just pay it off.

For those with variable interest rate student loans(loans taken out prior to July/August 2006), their rates were no longer variable once they consolidated their loans.

 

[jagec]

don't forget benefits of student loan deductions on taxes

A pretty minor benefit in most cases.

I will be graduating with approximately ~30k in debt. I have a small amount at high rates 6% to 9(!)%, and some at rates of 2-4%. I plan on paying off the high rate loans as fast as possible and then sitting on the remaining low rate loans, with the intent of being able to buy a house quicker at a 20% down payment.

Damn, tell me you at least worked part-time during school.

 

[Clinkster]

No idea. It's subsidized by the government so I assume it's pretty low.

Okay, glossing over the fact you don't know the interest rates to your own loans...

Subsidized usually means you're still in school or a recent graduate. Are you not paying interest?

 

[Net]

I've been in a similar situation. I went with retirement over student loans. I'm glad I did since I've been earning and average of 15% since then, a few years back.

My advice would be to max out retirement and save for an emergency fund. Student loans are very low priority. The government gives you a tax reimbursement on your loan payments. You'll have a lot to save for, house, car, family. I'd put it at the bottom of the list.

 

[EagleKeeper]

If it's lower than inflation (3.5%~), then don't pay it off.

That will work only if your income is increasing at the rate of inflation.

 

[EagleKeeper]

I've been in a similar situation. I went with retirement over student loans. I'm glad I did since I've been earning and average of 15% since then, a few years back.

My advice would be to max out retirement and save for an emergency fund. Student loans are very low priority. The government gives you a tax reimbursement on your loan payments. You'll have a lot to save for, house, car, family. I'd put it at the bottom of the list.

You get a percentage of the interest back. Only about 2K of tuition gets subtracted from the taxable income

 

[dave_the_nerd]

Student Loan Interest Rate = X.
Expected Interest/Return on investments/savings = Y.

If X > Y, pay off ASAP or refinance and consolidate until Y > X.
If Y > X, pay off as slowly as possible and profit.

Loan interest is tax deductible, but there shouldn't be much of that. (If your loans are at a sane interest rate - <5% or so - and $20k in loans really isn't THAT much.)

You took the tuition deduction when you paid the tuition when you were going to school. Not sure you get a do-over.

 

[soulcougher73]

My natural instinct is to want to pay off debt and be debt free. But if your monthly payments are low and easily managable and the interest is 3% of lower. I think if just keep making monthly payments and put that 30k to better use making me money.