UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: TMFRunkle Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308847  
Subject: Re: Student Loans Date: 4/8/1998 11:01 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<<The scenario: I have amassed $34,000 in student loans at %7.75 interest. Add an additional $4,000 at 5%, and my situation grows bleaker (more bleak?).>>

Your interest rates are relatively low. I would consider paying the student loans off on schedule rather than avoiding investing altogether. Many of us feel any loans below 8% should be paid on schedule and not accelerated. The reason is you have a good chance of getting better returns than that if you invest the extra funds. By the way, that $4,000 you owe at 5% is below the risk free interest rate from treasuries. Is it a "teaser" rate for a short period? If so, you may want to jump on that before the rate goes up. Otherwise, I'd just pay that on time too.

Of course, you have to look at your own situation. If being in debt makes you uncomfortable, by all means pay it off. Also, if you have concerns about future cash flows or employment, you will want to pay off the debt too.

George
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next

Announcements

TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Saul's Investing Discussions

Why Did I Buy a Bunch of PFIE Today?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement