Paying off some debt

[Mcat__cat!!!]

I had 100k from my parent to pay back some of the student loans. I’m in my second year now and estimate of ~400k in student debt when I graduate. My question is should i pay all 100k now or divide it into monthly payment to pay off the accrused interest and some principle. Thank you

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[TheGreatJoseon]

If I was given 100k for school loans, I would pay off my loans with the highest interest rate. Federal loans are 0% till the end of January; thus, I would wait till the 0% rate expires.

 

[zdoq]

If I was given 100k for school loans, I would pay off my loans with the highest interest rate. Federal loans are 0% till the end of January; thus, I would wait till the 0% rate expires.

Why would you wait for the 0% rate to expire? Wouldn’t it be better to pay things down now before they accrue more interest once the 0% rate is returned to the normal rates?

 

[TheGreatJoseon]

Why would you wait for the 0% rate to expire? Wouldn’t it be better to pay things down now before they accrue more interest once the 0% rate is returned to the normal rates?

You never know if Biden will extend the rate!! But you are correct in paying things down before interest starts kicking in.

 

[oralcare123]

They wouldn't extend. They need money now for their expensive "popularity" projects and you are considered to be "rich"so expect to be ripped off till your death
Pay off interest, so it doesn't accumulate

 

[TheGreatJoseon]

They wouldn't extend. They need money now for their expensive "popularity" projects and you are considered to be "rich"so expect to be ripped off till your death
Pay off interest, so it doesn't accumulate

Biden Student Loan Payment and Interest Pause: What it Means

President Biden extended the student loan payment and interest pause until September 30, 2021. Here's why it's probably the final extension.

www.studentloanplanner.com

Payment paused and rate extended till Sept 30th.

 

[oralcare123]

Enjoy, while it lasts

 

[Marcos0789]

Why would you wait for the 0% rate to expire? Wouldn’t it be better to pay things down now before they accrue more interest once the 0% rate is returned to the normal rates?

If I give you 100$ and tell you to give it back to me in 1 year. Why would you give it back to me tomorrow. You can still use those 100$ in the year ahead in case something happens. Invest it, save it in a bank account, etc. As long as student loans are at 0%, don't pay them back. It won't make any difference in your interest.

 

[pubhealthdent]

I had 100k from my parent to pay back some of the student loans. I’m in my second year now and estimate of ~400k in student debt when I graduate. My question is should i pay all 100k now or divide it into monthly payment to pay off the accrused interest and some principle. Thank you

Put that money in a high yield savings account or a six-month CD. Assuming the 0% interest ends 09/31, put all the money towards it right before interest starts again

 

[stumpdentist]

If I give you 100$ and tell you to give it back to me in 1 year. Why would you give it back to me tomorrow. You can still use those 100$ in the year ahead in case something happens. Invest it, save it in a bank account, etc. As long as student loans are at 0%, don't pay them back. It won't make any difference in your interest.

Agreed. Although your parents may specifically have said this should be used for student debt payment, starting a Roth IRA and maxing it out for the year is huge. Only 6000 bucks and the return on that would be way more than the student loan interest of that missing 6000

 

[doktorinprogres]

need earned income to do this

Agreed. Although your parents may specifically have said this should be used for student debt payment, starting a Roth IRA and maxing it out for the year is huge. Only 6000 bucks and the return on that would be way more than the student loan interest of that missing 6000

 

[stumpdentist]

need earned income to do this

True. Thank you for adding that