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Old 04-13-2007, 03:51 PM
KJS KJS is offline
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Join Date: Sep 2002
Location: Seattle, WA
Posts: 1,627
Default Re: Wiser Use of Money: Pay Off Student Loans / Invest

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Something to keep in mind is that a lot of your investments will be taxed, so you'll need a higher return on an investment than interest rate on your loan to make the investment the correct choice. At 6.8% you should almost certainly pay off the loan before investing.

I have a student loan at 7.2% that I'm aggressively paying down before I start investing. I'm pretty sure I'm making the right choice.

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Good point about taxing investments. But dethgrind can't you also deduct student loan interest off of your taxes, to the point where the effective interest rate is much less?

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I just did my taxes last night. 2500 is the max deduction for student loan interest. Came right off my income.

KJS
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