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Pay Extra Toward Student Loans?

Established Member

Pay Extra Toward Student Loans?

Hello everyone,

 

I'm looking to you for some advice.  I literally just mailed in my last car payment so the only debts I have are:

 

Mortgage @ 3.625% - $164,500

Student Loans @ 6.46% (blended rate) - $44,000

 

After paying my bills, using some money for 'fun', and contributing about $700/month to our 401k's, we will have about $2200 remaining each month.  We currently have about $15k saved.  My question is, what do you think the best strategy is with our money and debts?  I am thinking of paying an extra $1,000 toward my student loans each money until they are paid in roughly 2.5 years.  This will allow for us to save the remaining ~$1200 mixed between increased 401k, investments (stock, ETF, etc.), and cash.

 

What do you guys think about all this?

Message 1 of 8
7 REPLIES
Super Contributor

Re: Pay Extra Toward Student Loans?

 

Eliminating debt is always a good idea ~ I agree that paying the student loans down is a good approach.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 2 of 8
Frequent Contributor

Re: Pay Extra Toward Student Loans?

I totally agree about paying off that Student Loan as fast as possible.

 

Good luck

 

Message 3 of 8
Regular Contributor

Re: Pay Extra Toward Student Loans?

That's what I would do!  Student loans are the only non-dischargeable debt.

 

And I should know! Smiley Very Happy

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Starting Score: 426 Ch. 13 BK Filed Sep 2009; Discharged Jan 2013 Smiley Happy
Current Score: TU 706 EQ FICO 701 EX 704
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Message 4 of 8
Moderator Emeritus

Re: Pay Extra Toward Student Loans?


Cleanmachine wrote:

I totally agree about paying off that Student Loan as fast as possible.

 

Good luck

 


I agree, getting that monkey off your back would feel good!

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
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Current scores after adding $81K in CLs and 2 new cars since July 2013
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Message 5 of 8
Highlighted
New Visitor

Re: Pay Extra Toward Student Loans?

Always take out the one with the highest interest rate first! That being said pay extra on the student loan!

Message 6 of 8
New Contributor

Re: Pay Extra Toward Student Loans?

Depends on when you graduated.  IF recently, and loans are in deferment than pay on the UNsubsidized; interest just keeps compounding. If you are beyond that period, pay more than the minimum payment if you can. Student loan interest compounds DAILY! Good luck!


Starting Score: 525
Current Score: FICO EQ 790, TU 696, EX 683
Goal Score:
700+ across the board

Message 7 of 8
Frequent Contributor

Re: Pay Extra Toward Student Loans?

I would use the extra money to pay off the student loans.

Message 8 of 8