Debt Elimination Question

[David58]

Retirement approacheth. We have two significant non-mortgage debts, a student loan that we are paying for the parent's privilege on our son's education, and a trailer. Student loan is about $48K, the trailer about $25K. We have $48K available to pay down one or the other, or some part of each.

The student loan is with us to the grave, cannot bankrupt out of it, etc.

The trailer has some value as collateral, we could sell it if in a bind and not have that debt.

Seems to me that marking off the student loan on September 29 is the best approach, since no payment has to be made until then and the cash stack can still grow until we pay off. But I am not a finance and planning expert, so I thought I would appeal to other nonfinancial experts here on a hunting forum. Just kind of turning this over in my hands, trying to decide which is best (and the student loan payment is about 2X of the trailer).

Thanks for weighing in!

 

[Steiny]

Dave Ramsey would probably say sell the trailer and pay it off, plus pay off the student loans.
Boom ! You're debt free on all that stuff.

 

[TN2shot07]

Not sure on where you stand with the trailer but you’ll probably never have a better chance to unload it for a good price. If it’s not used regularly I’d sell it off and clear the student loans. If you want to keep it pay it off and chunk the rest on the student loan. I don’t like to owe money on things headed down in value.

 

[Jwill]

What are the interest rates?

 

[stealthy_bowman]

I’d sell the trailer, but if you really don’t want to do that then pay off the loan with the highest interest rate first.

 

[David58]

Dave Ramsey would probably say sell the trailer and pay it off, plus pay off the student loans.
Boom ! You're debt free on all that stuff.

Dave would lose on that one - the trailer gets the snot used out of it, portable elk camp, fishing camp, travel to see the kids camp, etc. But I do like Dave...

 

[Bambistew]

You took out a loan for your kids education?

I'd invest the cash and keep paying down the rest. And make your kid pay for his own education.

 

[David58]

I guess I should clarify a bit - we use the trailer like crazy, selling it would significantly change our recreation (we put 30 nights in it between Aug 1 and November 11 last year, having bought it in late July). We expect to come close to doubling that this year, if not more.

Interest rates on both loans are about the same (we didn't refi the SL, since it is a fed loan we got forbearance due to Covid, just basically been putting the payments in the safe the past year).

My logic is to clear the SL, since it is there all by itself, nothing to sell to help pay it off. Whereas if we get in a bind we could sell the trailer - it at least has a value. Am I thinking square here? Also, the payment on the SL would roll over to the trailer, allowing us to basically triple the monthly payment on it.

 

[Buffs35]

I guess I should clarify a bit - we use the trailer like crazy, selling it would significantly change our recreation (we put 30 nights in it between Aug 1 and November 11 last year, having bought it in late July). We expect to come close to doubling that this year, if not more.

Interest rates on both loans are about the same (we didn't refi the SL, since it is a fed loan we got forbearance due to Covid, just basically been putting the payments in the safe the past year).

My logic is to clear the SL, since it is there all by itself, nothing to sell to help pay it off. Whereas if we get in a bind we could sell the trailer - it at least has a value. Am I thinking square here? Also, the payment on the SL would roll over to the trailer, allowing us to basically triple the monthly payment on it.

Yep. Nuke the student loan. And if you like the trailer, and you can afford it, keep it. I agree with your m.o.

 

[CoffeeGoat]

Depending on your income the student loan may be tax deductible (not sure on parental loans). If you can be diligent about not touching the money, it'll likely grow faster invested than you'll lose money on the interest on the student loan. But for peace of mind you can pay on the student loan.

 

[Werty]

You will be happier with no debt, and accumulate much more money in the long term

 

[Bowhuntrben]

I’d get the student loan paid off then work on the trailer.

 

[AvidIndoorsman]

I’m assuming private student loan given the information you provided. I would definitely pay that one off, then the trailer. You can always sell the trailer if you had to, private student loans are horrific in every respect.

for the gift of education, your son probably won’t really understand how much you did for him for a few years, but he will eventually.

 

[44hunter45]

I’m assuming private student loan given the information you provided. I would definitely pay that one off, then the trailer. You can always sell the trailer if you had to, private student loans are horrific in every respect.

for the gift of education, your son probably won’t really understand how much you did for him for a few years, but he will eventually.

This.

 

[David58]

I’m assuming private student loan given the information you provided. I would definitely pay that one off, then the trailer. You can always sell the trailer if you had to, private student loans are horrific in every respect.

for the gift of education, your son probably won’t really understand how much you did for him for a few years, but he will eventually.

He still has over $100K. Picked expensive schools - turned out well, but its been a lot of $$$ for a guy that could earn enough in the summer to pay for a year of schooling back in the day.

 

[AvidIndoorsman]

He still has over $100K. Picked expensive schools - turned out well, but its been a lot of $$$ for a guy that could earn enough in the summer to pay for a year of schooling back in the day.

Yeah we have enough loans to make most people shit their pants, so I feel for him.

 

[jt13]

Yeah we have enough loans to make most people shit their pants, so I feel for him.

Must've been nice when a guy could've paid his way though secondary education with a summer job at the grocery store.

We're right there with you.

Our monthly loan payments cost us just about as much as our rent and two car payments combined. You could buy a nice house on a decent plot of land in lots of areas of the country for what we still owe.

PSLF will kick in for me in about 3 years (1003 days but who's counting). That will knock about 1/3 of total student debt out. It'll be another 6.5 years before the rest of it is paid down.

My hats off to anyone that foots the bill for their childs education. Hopefully it's money well spent and they realize what a huge help that it truly is

 

[AvidIndoorsman]

Our monthly loan payments cost us just about as much as our rent and two car payments combined. You could buy a nice house on a decent plot of land in lots of areas of the country for what we still owe.

Yeah I try not to do that math… you know a dall sheep hunt every year lol

 

[jt13]

Yeah I try not to do that math… you know a dall sheep hunt every year lol

Well thanks for ruining my night. Before now I never did the math in terms of missed alaskan hunting opportunities...

 

[mdhunter]

Man, I went to solid state school and paid $1,200 per semester in 1990. I never lived on campus or had a meal plan but I managed to work my way thru it. I have been lucky with my career however my kids now go to college and its somehow costs $60k with room and board. WTF happened? Glad I can provide for them but an education is seriously overpriced IMHO.

Sorry for the rant...I agree with the and suggest paying off the student debt first.