- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Pay Extra on Student Loan vs Invest?
Posted on 2/13/24 at 9:43 am
Posted on 2/13/24 at 9:43 am
3 Student Loans Remaining Balance: $52,702
Minimum Payment:$615.47
Standard Payoff Date October 2033
Interest rates of 5.3%($13k), 5.28%($19.8k), 4.3%($19.8k)
We are leaning towards paying $2,750-$3,000/mo and snowball the remaining based on interest rate and and have this sucker paid off by September/October of 2025 or maybe even 1-2 months sooner based on overtime, bonuses, etc.
We can comfortably budget this amount, or do you have any other recommendation that could save/make money in a similar amount of time? We just want it GONE.
Minimum Payment:$615.47
Standard Payoff Date October 2033
Interest rates of 5.3%($13k), 5.28%($19.8k), 4.3%($19.8k)
We are leaning towards paying $2,750-$3,000/mo and snowball the remaining based on interest rate and and have this sucker paid off by September/October of 2025 or maybe even 1-2 months sooner based on overtime, bonuses, etc.
We can comfortably budget this amount, or do you have any other recommendation that could save/make money in a similar amount of time? We just want it GONE.
7
Posted on 2/13/24 at 9:53 am to Roux57
We just want it GONE.
--
Pay it off and move forward.
--
Pay it off and move forward.
Posted on 2/13/24 at 9:54 am to Roux57
I like your plan.
Get this SL debt knocked out asap
Then start putting that $3k a month in an S&P index fund
Not sure of your age but you sound fairly young
That $36k per year in a S&P index is going to make you a multi millionaire in 20 years
Get this SL debt knocked out asap
Then start putting that $3k a month in an S&P index fund
Not sure of your age but you sound fairly young
That $36k per year in a S&P index is going to make you a multi millionaire in 20 years
Posted on 2/13/24 at 10:10 am to Roux57
If you aren't eligible for any possible forgiveness that may be handed out and you already have 6 month emergency fund built up pay off this debt as soon as you can. yes you may be able to invest the extra amount monthly and make slightly better gain but no guarantee and if market correction thats be warned over and over ever happens then you took a step backwards.
we refinanced a year ago and got like 2.75% over 7yr so we are only paying the min required but have been stacking away the extra required to have loan paid off in 2 years since saving account is earning 4.5% interest. if rates flip and loan rate is higher then we will pay the larger amount for the remaining months to still be able to pay it off in 2 yrs. end of 2 years if savings account still making 2x loan rate we will just continue to pay monthly min and collect the interest difference.
we refinanced a year ago and got like 2.75% over 7yr so we are only paying the min required but have been stacking away the extra required to have loan paid off in 2 years since saving account is earning 4.5% interest. if rates flip and loan rate is higher then we will pay the larger amount for the remaining months to still be able to pay it off in 2 yrs. end of 2 years if savings account still making 2x loan rate we will just continue to pay monthly min and collect the interest difference.
Posted on 2/13/24 at 10:44 am to Roux57
What are you contributing to retirement plans? Taking full advantage of any match? Roth IRAs?
I'd prioritize maxing tax advantaged investment accounts before paying off relatively low interest loans. I once paid a 5.5% mortgage early and looking back missed out on tons of stock market gains.
If you're fully investing in retirement, HSAs etc. then I'd consider paying off those loans before taxable brokerage but it would be more psychological not math.
If you're not realistically going to invest the difference then go for the loan payoff. Best of intentions are often overcome by lifestyle/spending creep unless you have very intentional goals and discipline in place.
I'd prioritize maxing tax advantaged investment accounts before paying off relatively low interest loans. I once paid a 5.5% mortgage early and looking back missed out on tons of stock market gains.
If you're fully investing in retirement, HSAs etc. then I'd consider paying off those loans before taxable brokerage but it would be more psychological not math.
If you're not realistically going to invest the difference then go for the loan payoff. Best of intentions are often overcome by lifestyle/spending creep unless you have very intentional goals and discipline in place.
This post was edited on 3/20/24 at 4:24 pm
Posted on 2/13/24 at 7:54 pm to Roux57
Student loan debt would be the last thing I paid off. If you die, the debt dies with you. The interest can be written off. On average, you will make more in an S&P 500 index fund and can use those earnings to pay the debt.
If you are paying it off for peace of mind, no numbers can calculate how much you value that. It may be worth way more than an extra 4%-6% on investment for you to have peace of mind.
If you are paying it off for peace of mind, no numbers can calculate how much you value that. It may be worth way more than an extra 4%-6% on investment for you to have peace of mind.
Posted on 2/13/24 at 8:44 pm to Roux57
Basically depends on how much you value being out from under it.
The interest rates on the loan balance are about the same as the returns on a CD, so the typical argument (being better off investing) doesn't apply.
You could do better in stocks, but those are unreliable in the short term. If that money goes into stocks and we get a bear market in the near future, you're worse off.
Then hit it as hard as you can. Put the amount budgeted toward the loans. Also pay any extras left over at the end of each month, like the electric bill coming in under budget.
The interest rates on the loan balance are about the same as the returns on a CD, so the typical argument (being better off investing) doesn't apply.
You could do better in stocks, but those are unreliable in the short term. If that money goes into stocks and we get a bear market in the near future, you're worse off.
quote:
We just want it GONE.
Then hit it as hard as you can. Put the amount budgeted toward the loans. Also pay any extras left over at the end of each month, like the electric bill coming in under budget.
Posted on 2/14/24 at 11:58 am to Roux57
Your marginal income tax bracket is at least 22%, so keep that in mind if you’re not maxing out employer retirement plans yet. The immediate tax savings now vs unknown future taxes is a bit of a problem, but still worth discussing.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News