| Posted By |
Message |
|
|
Pay off Loans Now or Later?
In a few months, the balance on my student loan will reach the balance in my savings account).
Interest on my SL is 3% fixed.
Interest on my savings account is 1.25% (online account).
If I wipe out my savings account, I will still have a 'back up' savings account -my 401K which has more than enough to cover me for 8 months in case of an emergency.
So should I wipe out my savings account and get rid of my loans, or just keep paying my monthly payment until my estimated pay off date of around 2013/2014 (if I only pay the minimum, my pay off date is really 2021)?
Thoughts?
Message edited 7/21/2011 12:56:52 PM.
|
Posted 7/21/11 12:42 PM  |
| |
|
neener1211
:-)
Member since 4/07 22952 total posts
Name:
J
|
Re: Pay off Loans Now or Later?
I would set a date that you want your loan paid by. Take the total amount of loan, divide by that many months, and make the payment each month.
So if you have a 20, 000 loan and want it paid by July of 2013. Pay $833 per month towards the loan. That way you don't deplete your savings in the process.
|
| Posted 7/21/11 1:06 PM |
| |
|
|
|
Re: Pay off Loans Now or Later?
Good idea, I've been throwing an extra $ 1,000 toward the loan so managed to get it down to where my savings acct balance it - just not sure whether I should get rid of it, or just keep to the payment schedule I set for myself a few months ago..
thanks!
|
| Posted 7/21/11 1:11 PM |
| |
|
neener1211
:-)
Member since 4/07 22952 total posts
Name:
J
|
Re: Pay off Loans Now or Later?
Posted by EclecticEsq10810
Good idea, I've been throwing an extra $ 1,000 toward the loan so managed to get it down to where my savings acct balance it - just not sure whether I should get rid of it, or just keep to the payment schedule I set for myself a few months ago..
thanks!
Since it has a higher interest rate, if you're already adding $1000 towards it each month, then maybe add 500 out of your savings each month (if you're willing to do that). I personally would not wipe out my savings though (I don't consider 401k as a backup savings).
|
| Posted 7/21/11 1:34 PM |
| |
|
Blazesyth
*yawn*
Member since 5/05 8129 total posts
Name:
|
Re: Pay off Loans Now or Later?
I think you can write off the student loan interest?
That may be one reason to not pay them off entirely.
|
| Posted 7/21/11 9:53 PM |
| |
|
|
|
Re: Pay off Loans Now or Later?
Posted by Blazesyth
I think you can write off the student loan interest?
That may be one reason to not pay them off entirely.
my income is too high to qualify for the interest deduction on our taxes...plus since i filed jointly with my husband, no chance of meeting those criteria either because both incomes are high...i just want to pay them off for peace of mind..
|
| Posted 7/22/11 1:28 AM |
| |
|
Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
|
Re: Pay off Loans Now or Later?
Posted by EclecticEsq10810
Posted by Blazesyth
I think you can write off the student loan interest?
That may be one reason to not pay them off entirely.
my income is too high to qualify for the interest deduction on our taxes...plus since i filed jointly with my husband, no chance of meeting those criteria either because both incomes are high...i just want to pay them off for peace of mind..
Once I made too much to deduct the interest, I multiplied my payment by 4.
|
| Posted 7/26/11 2:46 PM |
| |
|
