Retirement versus paying down debt?
The key to financial power lies in your credit rating. If you plan to get a home loan, save money and get better credit starting now!
I am 44 years old, single, currently no children. I rent my apartment and have $109,000 in student loan debt and a $22,000 auto loan. The student loan interest is 7.75% (KILLING ME). My income last year was about $115,000. I currently divert $225 per pay check or $5,850/year into my 401K plan for two reasons; to build a retirment plan and to get the tax break. I am wondering if I should be putting this money toward my student loan instead. In January 2009 my student loan interest rate will drop to 7.25%. I do already have about $25,000 in a 100% vested profit sharing plan that is going to be rolled into my 401K and I already diverted about $3,500 into the 401K. I am fishing for general opinions. Should I put every extra penny toward paying down my debt or split my money between paying my debt and saving for retirement? I do put 10% of every paycheck into a savings account for a prudent reserve which is currently only about $4,500 because I keep having "emergencies."
Retirement versus paying down debt?Put a portion towards the loan.
Set up an amortization for yourself to determine how soon you can pay that off by adding extra to the principle.
You might even look into another loan at a lower interest rate.
Prime rate just dropped to 2.75. You should be able to beat 7.75.
The car loan is collateralized by the car.
You may be able to combine the two at a lower rate.
Go to this site. Use the amortization template. It allows you to enter additional principal.
More Related Questions and Answers ...
The loan information post by website user , we not guarantee correctness.