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?
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.
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.
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.
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.
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.
don't forget benefits of student loan deductions on taxes
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.
No idea. It's subsidized by the government so I assume it's pretty low.
If it's lower than inflation (3.5%~), then don't pay it off.
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.