[USER]

Student loans || I’m debating throwing a chunk of my savings at student loans, or lowering how much I’m saving and upping my payments. Overall I owe 14713. 5,530 at 4.8% on one and 9162 at 4.2% on the other. I’m currently paying 250 on the smaller amount and 100 on the larger and saving about 800 a month.

• Would you pay off the smaller loan and continue paying 350 on the remaining 9k?
• or save less and up payments.
• open to any other suggestions.
• Should I pay off the smaller loan with savings?

[Samantha]

I’d continue to save but decrease the amount. I’d 1/2 it. Use the 400 towards your loans. The faster those are gone the better.

[Marion]

I would keep saving until having 6 months in savings then pay off highest interest first.

[Astell]

Never ever use an emergency savings for something that is not an emergency.

Never.

Now if you feel you have a decent amount of savings and you want to start lowering what you contribute to savings and divert it to the loan that’s fine.

But we do NOT touch emergency savings for something that is not a TRUE emergency (shelter, food, water…things to survive). Have to make that a hard rule in your head in order to protect your primary savings account.

Don’t forget to take a look at: Student loan question…

[Sarah]

I’d work towards paying the 4.8 loan, which looks like the smallest one as well. Once that’s paid off, take the amount you were putting down on that and put it towards the 4.2% loan.

[Ancella]

One of the first times I ever sat down with a financial planner, she told me that she understands that student loans are very annoying because of how long they go on, but that I needed to get rid of higher interest stuff first, like credit cards, or loans that are higher than the 4.2, or 4.8%.

[Kimberly]

I keep $1,000 in an emergency fund until all our debt was paid off. The only savings I was willing to do was for tax benefit, IRA or employee 457 plans. I always suggest paying off that debt first.

You’re paying way more on debt interest than you will make on savings.

Have you seen: 73k student loan debt, $900/month payments, interest only? Refinance? PSLF?

[Doris]

Biden just did a massive loan forgiveness. Check to see if your loans were listed!

[Corie]

Totally denpend on how much savings you have. Do you have at least 6 mo of emergency funds in a savings. If so, I would pay off small one and maybe split the amount you’re putting in savings between the savings and loan.

If not, I would pay small one off and put the $350 on the large one until you hit that emergency savings amount.

[Sonya]

I’m always big on paying off anything that is accruing interest as fast as possible unless you are earning more in interest on your savings.

[Alli]

If these are not private loans, I wouldn’t pay them off with any aggressive moves — make sure you’re signed up for the SAVE plan and that might radically reduce your payment and your interest payments.

[Sara]

I’d pay off the smaller one and throw that payment at the larger, but I wouldn’t throw emergency savings at either.

If that is the case, I’d put extra payments beyond the minimum of each-even small amounts lessen the principle, thus the interest you’re paying on it.

[Marty]

I’m in a similar boat but I was able to get on the save plan or whatever it’s called so I have no payment due and no interest accumulating. So I made a spreadsheet and saw how much in interest each loan would accumulate the most interest per month and I’m just making payments on that loan only.

Doing it this way I was able to see that the higher interest loan isn’t always the one you’re paying the most on interest each month.

In your situation over the life of the loan you’ll pay more in interest on your larger loan than the one with the higher interest rate.

[Gisela]

Savings accounts are up to 5.35% so I’d save a chunk of money for 6 months or a year in a GIC and then nail the loan with your savings. I’ll hit the highest interest one first.

I’d also up the payment so that you’re working on the principle – not just the interest.

Put an extra 150 on the highest debt, an extra 50 on the smaller amount.

Bank the rest on high interest.

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