- 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
re: Paying off school loans vs Investing
Posted on 6/19/13 at 11:45 am to tdavi48
Posted on 6/19/13 at 11:45 am to tdavi48
Work diligently to elminate any debt not securing the main home.
Student loans are one of the highest categories of "pay this off now" as they have the IRS as their bill collector, and are generally not subject to loan modification or discharge in bankruptcy - despite the interest rate and the tax benefits, they provide the most bang for the buck of payoff.
Student loans are one of the highest categories of "pay this off now" as they have the IRS as their bill collector, and are generally not subject to loan modification or discharge in bankruptcy - despite the interest rate and the tax benefits, they provide the most bang for the buck of payoff.
0
Posted on 6/19/13 at 12:02 pm to Vols&Shaft83
I was wondering a similar thing to the OP. I've set aside $10k cash. My options are...
a.) pay off the remaining $6660 of student loans (3.75% interest rate), and the other $3340 to my credit card (13.85% interest rate), which would be almost my whole balance left on the card.
b.) pay off student loan and invest the remainder in the market.
c.) pay off credit card and invest the remainder in the market.
a.) pay off the remaining $6660 of student loans (3.75% interest rate), and the other $3340 to my credit card (13.85% interest rate), which would be almost my whole balance left on the card.
b.) pay off student loan and invest the remainder in the market.
c.) pay off credit card and invest the remainder in the market.
Posted on 6/19/13 at 12:07 pm to tdavi48
If you would pay 30% of your investment income in taxes then 4.5% interest rate is equivalent to earning a 6.43% (4.5%/0.7) return.
A guaranteed 6.43% return combined with the benefits of less debt (psychological and borrowing power) is hard to beat if you don't already have a good spot to stick the money. Someone said something earlier that seemed to conflict this, but paying off debt IS compound growth.
A guaranteed 6.43% return combined with the benefits of less debt (psychological and borrowing power) is hard to beat if you don't already have a good spot to stick the money. Someone said something earlier that seemed to conflict this, but paying off debt IS compound growth.
Posted on 6/19/13 at 12:11 pm to ColoradoAg03
quote:
I was wondering a similar thing to the OP. I've set aside $10k cash. My options are...
a.) pay off the remaining $6660 of student loans (3.75% interest rate), and the other $3340 to my credit card (13.85% interest rate), which would be almost my whole balance left on the card.
b.) pay off student loan and invest the remainder in the market.
c.) pay off credit card and invest the remainder in the market.
Assuming you don't have any other savings (emergency funds). Here's what I would do:
1.) Keep $1000 in savings for an emergency
2.) Pay off credit card
3.) Throw the remaining $5660 at the student loan, and then bust arse for a couple months and finish the fricker off.
Then start investing.
GO GO GO
Posted on 6/19/13 at 12:11 pm to ColoradoAg03
ABSOLUTELY pay off the credit card. Weigh paying off the student loan versus investing the remainder. For most people, I would say pay off the student loan as well. If you feel like you have good investment opportunities then consider it, don't go looking for somewhere to force the money in stead of paying off the loan.
Posted on 6/19/13 at 12:24 pm to eelsuee
I do have other savings, the $10k is basically free cash flow I have set aside for a while. I think putting all of it towards debt would be the best idea it sounds and skip rolling the dice in the market, even though I do feel good about where I would invest it, I wouldn't see returns right away like a day trader.
I guess the question now is to either pay off all my credit card and then more than half my student loan, or pay off all my student loan and then more than half my credit card balance.
One thing I have also heard, but not sure if true, is that there is a target % of your credit card limit that you want to maintain your credit card balance at. That you don't want to have a zero balance on your card (I only have one credit card). Is this true?
I guess the question now is to either pay off all my credit card and then more than half my student loan, or pay off all my student loan and then more than half my credit card balance.
One thing I have also heard, but not sure if true, is that there is a target % of your credit card limit that you want to maintain your credit card balance at. That you don't want to have a zero balance on your card (I only have one credit card). Is this true?
Posted on 6/19/13 at 12:40 pm to ColoradoAg03
CC has much higher interest rate. Pay it off.
Posted on 6/19/13 at 12:46 pm to ColoradoAg03
When I bought my first house, the only debt I had ever had was a $5k student loan, which I paid off a few years earlier. I had a credit card for a long time and paid it off every month. My credit score when I applied for a loan was between 790 and 800.
And pay off that entire credit card. The only question is how much to apply towards student loan and how much to invest.
And pay off that entire credit card. The only question is how much to apply towards student loan and how much to invest.
Posted on 6/19/13 at 1:08 pm to eelsuee
I went credit card first then the rest to student loan. Only $1900 of debt left under my name 
I should have the rest of that student loan paid off by new years.
Appreciate the tips
I should have the rest of that student loan paid off by new years.
Appreciate the tips
Page 2 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News