No. of Recommendations: 2
I will be coming into a bit of money soon in the coming months (bonuses). i'm wondering if I should invest this money or pay off one of my student loans. I have about $30k in student loans across 5 accounts. The interest on these loans ranges from 3.75% down to 2.5%. Luckily the biggest loan ($14K) is at the lowest interest (2.5%). So I'd be looking to pay off one of the "high" interest loans of around $4k at 3.75%.

Are the loan rates fixed or variable?

If they are variable, you need to look at the index that they are based on and see how long you think it's going to stay as low as it currently is.

The question is should I use this money to pay off that loan or should I continue putting this money into my equities portfolio? Most of those equities are SA picks and have generally been doing quite well.

Given the low rates that you have (and assuming they will stay that low), that's a question you have to answer for yourself, based on how well you can sleep at night using the student loans as an effective margin loan - it all depends on which risks you are willing to take.

AJ
Print the post  

Announcements

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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.