What's the fastes and easiest way to pay off my student loans?
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I have loans from college, and i don't want the burden of them for long. I want a quick way to get rid of them. how can i do this?
What's the fastes and easiest way to pay off my student loans?Hi I'm a financial planner by trade and I'm going to take a slightly different approach to this answer, although it's not the question you asked.
Although carrying debt can be emotionally troubling for some, from a strict financial standpoint, you're unlikely to ever have loans at a lower rate, especially if you consolidate. Also, student loans are not looked upon unfavorably when attempting to make other purchases, such as a house, while credit card and other debt is.
I encourage my clients with student loans to pay the minimum amount on the loan each month. If it can be stretched 30 years, you come out way ahead. First, for many the studen loan interest is tax deductable. Second, the rates that you borrow at are lower generally than the interest you can recieve on a good quality bond. So if you borrow at 6% and have an I Bond yielding 6.75%, you are making money by not paying off the loan. Especially considering the tax benefits fo the loan and the tax deferred status of an I Bond.
On a $50k loan given that scenario you could come out up to $20,000 ahead over 30 years by not paying the loan early.
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