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Frequent Contributor
pjxf99
Posts: 336
Registered: ‎04-14-2008
0

paying off loans--advice please

I still owe about 10000 in student loans. I've only made minimum payments for a while, because I didn't pay much attention to these things before.
 
I'm going back to school in the fall.
 
I'm about to get a 5000 dollar bonus from my job.
 
On my reports, it lists my student loan amounts as my balance, and while I have good scores it says I could lower that balance to make them higher. I have no cc debt.
 
I just got a couple of new cards, increasing my available credit. They're not reporting yet.
 
Do I take the 5000 and throw it at the loans?  Would that make any difference, esp. since they'll most likely go into deferral when I start school again? Or just hang onto it (invest it) and hope I'm able to pay off all loans when i get my masters? Is there ever much financial benefit to paying student loans off early? I would think since the interest rate is relatively low you could make more from that money on a good year in the markets.  
FAKO TU: 730 (Too poor to check the real scores these days!)
New Member
tgirlnh
Posts: 7
Registered: ‎06-13-2008
0

Re: paying off loans--advice please

Good question, what is your current interest rates on your loans? Are any of them subsidized by the government(meaning they'll pay the interest while in-school? Unless you were one of the lucky ones to fix your rate back when they were 2-3% chances are you can't get a better return at this point unless you invest very wisely. How are you going to pay for school now, loans, out of pocket, tuition reimbursement? But here's another question, what do you have in savings right now? If something were to happen where you needed a large amount of money (car repair, unemployment, etc) would you survive? Here's what I would do: Payoff anything higher that you have for debt (car loan) first. Then determine how you'll pay for school now, if out of pocket use the 5000 to pay tuition since interest rates for new loans are most likely higher than what you have they're 6.0 to 6.8 for fed loans. If not out of pocket but you have no, or very little, savings I would put some of it in a high interest savings, then put the rest towards your loans. Pay off the ones that will accrue interest while you're in-school first. Student loans are not bad debt, the interest you pay is tax deductible and you don't lose value like you would on a car.
Frequent Contributor
pjxf99
Posts: 336
Registered: ‎04-14-2008
0

Re: paying off loans--advice please

I have some savings, but I'd like to build that up. I don't have a car payment now. My car is older but still in good condition (1998). If it needed major repairs I'd seriously look into just buying a new one.
 
Should I go ahead and take the loans, and put them in savings, then pay them off once I graduate? I've heard that's a good plan...
FAKO TU: 730 (Too poor to check the real scores these days!)

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