Wiser Use of Money: Pay Off Student Loans / Invest

[Jurollo]

18k of it was a personal student loan at 9.25% now
18k is at 4.75%

I am assuming it would be prudent to pay the 9.25% now and then maybe pay the other off piece meal? I am contemplating just paying them both off as I would then literally have no monthly payments outside of a cell phone. I own my car free and clear and have paid rent for the next 6 months. Outside of poker, upon acceptance of a job offer I recently got I will be making $75k+ a year so the $400 I am paying a month now could get moved to investments as I move along.
~J

[MasterLJ]

Oh wow, I was totally assuming a lessor rate.

Pay those off and it's not close imo.

[Jurollo]

[ QUOTE ]
Oh wow, I was totally assuming a lessor rate.

Pay those off and it's not close imo.

[/ QUOTE ]
Yea, I didnt realize half of it was so high, I am going to pay the 18k off at the huge interest rate, then maybe leave the federal ones @ 4.75% for now and keep a decent amount of liquidity (which would allow me to invest in real estate as well).
~Justin

[mmbt0ne]

I started off putting away enough money that I could live for a couple months if I suddenly got fired. Now I'm paying everything off as quickly as possible while also putting a little more money away. I just hate the feeling of student loans.

[claudenm]

Ha, I have been thinking about this alot recently, although it is more of a theoretical fantasy, as I don't have the money to pay it off (broke and talentless FTW!)

I pay $200/month on my 15k loan @2.875%, what are all of your thoughts about increasing it another $100 vs. saving that $100? That may be a bit trivial, but thanks in advance for your thoughts.

[skylos]

That sounds like a good plan to do half and half. I'm not a financial advisor or anything close but my understanding was that was that when your young is the time to be aggressivve with investments and go for the big returns since you have a whole career of income ahead of you and its not like you need the money anytime soon for retirement or something.

[MrMon]

[ QUOTE ]
Ha, I have been thinking about this alot recently, although it is more of a theoretical fantasy, as I don't have the money to pay it off (broke and talentless FTW!)

I pay $200/month on my 15k loan @2.875%, what are all of your thoughts about increasing it another $100 vs. saving that $100? That may be a bit trivial, but thanks in advance for your thoughts.

[/ QUOTE ]

Why, why, why, oh why would anyone even consider paying off a 2.875% loan or paying it faster than the minimum? Considering the rate of inflation is higher than that, and you can get a higher ROR on almost any CD, there is no way you should ever pay this off. Pay any other debt first. Save for a house, as this will reduce your mortgage by giving you a higher down payment. Buy CDs. Play higher stakes. Just about anything other than putting it all on red or buying a scratcher ticket.

FWIW, I am able to get grad stuedent loans that after graduation will convert to 0.75% per year. I will take every penny I can get and pay it off as slow as they allow. When someone hands you practically free money, you definitely take it.

[jzpiano]

How the hell is everybody getting loans with the interest rates so cheap? I can't seem to get anything below the 6% line.

[MrMon]

In my state, if you become a public school teacher upon graduation, you get the megadiscount. Some states have similar programs for nurses or other professions that they have a shortage in.

[kidcolin]

I think my mother has that deal in MA.

As for me, all my loans were federal loans. Initially they were 5.25% I think, but after I consolidated they were 4%, and once I signed up for paying with direct debit out of my checking account, they knocked it down to 3.5% or 3.25.. I forget. It goes down some more after 2 or 3 years of not missing a payment.