Student loan question

[Jwill]

I have about $5k left to pay off, interest rate of 3.1%, my payment is about $180/mo. Any pros to paying this off early?

 

[spook12]

Do you have any other outstanding debt? If so are you paying more than 3.1% ?

 

[DreaminofMT6X6s]

Two things you never want to pay for...depreciation and interest! Spook has a good point also. Any other debt with a higher interest rate is your starting point. Why would you want to pay $180/month for anything with an interest rate? Pay that off ASAP to increase your savings, IRA, mutual funds, play money...anything other then debt.

There are too many benefits to list paying off your debt. How long would it take you to pay this at $180/month? Years...like three anyway. There is ZERO benefit to making monthly payments.

Good luck.

 

[CabinFever]

I pinched until I had the cash to pay mine off early last year. If nothing else it gets rid of one more thing hanging over your head. Yeah its fairly "cheap" money at that interest rate but I think if you have the cash get rid of it. You can get that interest rate towards some real estate right now.

 

[jryoung]

Pay off higher interest rate debt first. Do you get to deduct your interest on your return? If so your effective rate is extremely low and pretty much free money.

I guess you didn't take finance with that education.

 

[spook12]

I don't mean to sound preachy, but you have basically been making a $180 per month investment into yourself . Keep doing it, as soon as that loan is paid off,put that money into something that will help you live debt free. Eliminating debt can put more money in your pocket than most people realize.

 

[dustinf]

I don't have any advise, but consider yourself lucky to have such little debt left.

My wife still has about $60,000 left and we've already been paying for 8 years.

Saddest part is, she's only able to work part-time now because she was injured in an accident...

 

[sweetnectar]

Dustin that stinks....hope she can recover. I think of people who are paying their student loans on history and English degrees...you know the kind of degrees that land you that high paying management position at McDonalds. Bad debt can do bad things to people and marriages.

 

[bigeasygator]

I figure conservatively I can get about a 6% return on my money. Therefore, anything under 6% I tend to pay off monthly. Any debt over 6%, I'll pay off. If all I'm left with is debt under 6%, I'd put that money somewhere else (stocks, 401k, IRA, etc). 3% is damn near free money.

 

[Nemont]

Student loan debt is a little different animal then having a mortgage or revolving credit account or a vehicle payment. Student loan debt cannot be discharged even in Bankruptcy so IMO you should make it a priority to pay off first regardless of the interest rate because if the unexpected happened and you hit some troubled times you can't restructure student loan debt.

Nemont

 

[nidahunter]

Think of it this way, if it was paid off you would have 180.00 a month to put towards a new gun!

 

[dustinf]

Dustin that stinks....hope she can recover.

Thanks.

She was medically cleared to have a baby last month, so we're really excited.

 

[Rat Fink]

Dustin that stinks....hope she can recover. I think of people who are paying their student loans on history and English degrees...you know the kind of degrees that land you that high paying management position at McDonalds. Bad debt can do bad things to people and marriages.

Ridiculous statement right there. My History degree is recognized by many disciplines as a credible degree in the field and by professional certifying organizations. Architecture, Law, GIS, Planning, Journalism etc. Just to name a few. There are plenty of others as well. My education landed me a great job by Montana standards.

 

[jryoung]

Thanks.

She was medically cleared to have a baby last month, so we're really excited.

You'd think the doctors would realize you can't have a baby in arrears.

I have paying $800 on our SL debt, but the ROI makes it a no brainer investment.

 

[dustinf]

You'd think the doctors would realize you can't have a baby in arrears.

She no longer allows me to attend any of the doctor's appointments. She acts like fart jokes, or awkward questions about the doctor's bathroom habits, are going to affect her ability to carry/deliver a healthy baby...

 

[jryoung]

I asked our midwife if a Heisman pose was appropriate after I caught my son.

 

[Calvin]

Always pay off debt. If you can, pay it off and be done with it forever. 3% is 3%,and it's nothing but a ball and chain that could prevent you from taking a risk down the road that could make you more money. The only acceptible debt is a house, and you better be making some sizable extra payments to pay off a house in less than 10 years. 5 is better.

 

[Calvin]

Ridiculous statement right there. My History degree is recognized by many disciplines as a credible degree in the field and by professional certifying organizations. Architecture, Law, GIS, Planning, Journalism etc. Just to name a few. There are plenty of others as well. My education landed me a great job by Montana standards.

I guess it just depends on the job you want, how much you want to make, and how much/little you want to do. History degrees, as well as a lot of other degrees go very far for those wanting .gov jobs, city jobs, state jobs, teaching jobs, etc. The benefits are killer, and the pay is usually average. Not all seek that lifestyle, and that is why most don't see the value in a degree like history.