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Hello,

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%.

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.

Thanks,
_Ramy
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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
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Tax rates and other debt also matter -
If you have a car loan, credit card debit, or almost any other debt (besides a mortgage) you are probably better off paying off the other debt.

If you no longer qualify for the student loan interest deduction, and you can get one of the retirement savings credits, you might be better off putting the money into a Roth or traditional IRA, claiming the credit and using any extra in your tax refund to pay down the loans.

If it were me, and I was getting enough to pay off one of the loans, I would probably tend to do that, unless I could substantially change my tax situations.
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