I agree - a Student Loan is pretty much the cheapest money you’ll ever borrow - even despite the interest rate rising sharply recently.

I’m currently deferring my student loan (I think the rules allowing deferrement may have changed since I left Uni), although I may go over the income amount when you’re required to start paying it back soon, so I might have to start paying it off later in the year. I’d rather put the money to better use elsewhere though (credit cards, mortgage).

If my interest rate was tied to inflation I’d probably feel differently

As it is, one sits at 9% and the other at 7%… yuck.

Good thing for people to think about - I just “negotiated” my wife’s schools down from a $100 payment per month to $39 a month because her interest rate is locked in at 3.00% . . . The difference in payments is being contributed toward our retirement.

I completely agree with not paying student loans back early, that said I am aiming to pay mine off in full this year. I was happy with the little deductions while I lived in the UK but after moving out of the country, the hassles of paying small amounts to debt back in the UK are too great, I have set up a seperate high interest savings account with monthly contributions and when it is equal to my loan debt I will pay it off. If I still lived in the UK, I would follow your plan though.

Yeah, I agree. Of my debts, my student loans are likely the last ones that will get paid off. A few of them are at higher interest rates, but most are very good (3.75% range).

Still, it was alot easier getting (and spending!) the student loan than it is now paying it back!

Thanks for explaining your reasoning on slowly paying back your student loans. You seem to have a solid plan and if it’s working for you, then you should do it.

I think you are doing the right thing. If you wanted to pay down debt then pay down the mortgage since it is “riskier” so to speak than the student loan - if you are unemployed, you will still have to pay the mortgage.

My definition of debt-free includes my mortgage which coincidentally is almost exactly the same size as yours, so according to moi, we both have a long way to go before being debt-free.

Mike

I also agree. I have a student loan that amounts to $50/mo US (which is worth what, .25 cents in Euros these days?), and is at a whopping 5%. I earn that much in my savings account doing next to nothing.

Interesting approach. I think you’ve explained a lot of reasons why it makes sense for you. As for us, I think we’ll be doing a moderate snowball at times. But that’ll depend on interest rates, income, investments and the like. After all, it’s important to get started investing early because of the wonders of compounding.

I still have a student loan I haven’t bothered to pay off. It’s only about $5300 now so I could pay it all off quite easily, but the interest rate is locked in at 2.625%. That’s going to be lower than inflation just about all the time so it’s never struck me as particularly smart to pay it off. I took out the loans as an insurance policy and never had to use them to actually pay for college so I’ve been sitting on the full amount of the loans ever since. I’m still glad I took them out since I’ve been making money off that money (though not much) and it contributed a great deal to my sense of security after I graduated to have the student loan money in the bank.

The terms are so generous and you can do so much better by investing your money, you’d be crazy not to do what you’re doing. Even tho’ I’m a great fan of debt-freedom (in fact, just seconds ago posted a long squib on how to pay off debt), I think your strategy is very smart.

Good to see I’m not the only one with this idea. Makes me feel a lot more comfortable.

@Looby:
If there was hassle involved - like if I was living abroad - I’d probably pay it off earlier too.

@Mike:
Interestingly I can get a savings account at a higher rate than my mortgage interest rate, so I’m not overpaying that one either. But that’s a much tighter difference.

I was just old enough to miss out on the student loans… had to make do with not a lot of money though

I’m not paying back my student loan, at all. My first degree was earned in Australia, and because of dual taxation agreements, my UK income isn’t counted for loan repayments (this may change in future, but I don’t believe it will change for me). Obviously I’m racking up inflation-linked interest, but I’m ignoring it in my debt/credit calculations. My ‘debt’ is only ~£3000, but I know of other people (mostly Swedes, whose student support is far more generous), for whom student loans become a significant factor in when, and when, they return to a home country.

Borrowing money for college is a big responsibility but college remains a smart investment for obtaining a satisfying career that earns a competitive salary.

I agree if your interest rate is fixed. It would actually work out to be less money or less purchasing power lost by paying it over time. But with it adjusting for inflation you have a problem. Is the inflation number in the UK a BS low number like here in the US?? If it is you are correct but if the government inflation number is anywhere near accurate then you need to pay it off early.

I envy those for who their money is left yet in order for them to invest it.
The trouble that the stock exchange does not deal with the little investors.
There is little profit there only according to me.

I agree the way you do it.

I wish that all of us could do such rewarding investments as college. They are the best deals we can have.

If you could manage receiving a scholarship that would pay all your room and board expenses your life would be all set.

Nice postings! On the othe rhand, according to the most recent statistics the unemployment rate is over 10.2%. It looks like that the mortgage market and car loan industry are on their ways to recover. mortgage modifications are high in demand as people face difficult situation financially in every corner of the country.

I discovered your website on search engines and understand a number of of your other posts. You might have a fantastic Blog!!! I just extra you to my Google News Reader. Glimpse forward to reading much more from you in the future. Keep up the beneficial do the job.

It’s really simple math. If you are paying a student loan at say 10% interest but you could invest that money at 11%, you invest the money. If you cant’ get more than the interest rate on the loan in investments… pay off the loan. Make money with your money, or get rid of the debt.

I was very thrilled to twig this site.I wanted to thank you for the benefit of this serious read!! I unequivocally enjoying every small scintilla of it and I comprise you bookmarked to stay out recent stuff you post.

Loan modifications ca are taking place in great numbers due to the rise of foreclosed real estates over the past year. It is advised to seek help from an attorney who has great experise to deal with a variety of issues during the modification process. They have a higher success rate than individual applicants.

What I love about telesummits is that they are perfect for a downturned economy. There’s no airline reservation to make, no hotel to book, no clothes to pack, no shuttle fees to pay, no bad hotel food to endure….it’s simply conducted from the convenience of your home, the home of your speakers, and the home of your participants. You offer high value with low cost — a great combination!

Grows your list fast. Many telesummit hosts report that holding a telesummit has helped them grow their list from 2,000 to 10,000 or 15,000 or greater in a span of only a few weeks when the participants are required to give their name and email address to get the telesummit call-in information. Best of all, the additions to the host’s email list are perfect leads for their target market. How did this happen? Because the host carefully chose their speakers who market products and services to a similar target market and created a telesummit around an issue or theme important to their target market. And, in an ideal world, the speaker has a large list and agrees to help market the telesummit to that list.

Helps you open the door for valuable joint ventures (JVs) and strategic alliances. Once you’ve invited someone to be a guest on your telesummit, you have provided a great service to them by introducing them to others who may not have previously heard of them. And, if you offered some healthy affiliate commissions for telesummit upgrades, they love you because you’ve helped them make money without a lot of effort.

They are more effective than most at managing their emotions. They feel like we all do but they are not slaves to their emotions.

Up-front fees – Some companies charge a fee before reviewing your situation or making a single call on your behalf. Beware of any attempt to collect payment from you before providing a service.

This is not a habit, this is a lifestyle. Don’t just wake up early without a purpose. Be early. Be there before others. Look for opportunities and embrace them. Waking up early means keeping your eye open to every available opportunity.

One of the quickest ways to go from “no name” to “big name” in your industry is to invite the industry experts to speak at your telesummit. The fact that you now have a connection with the movers and shakers in your industry gives you a leg up boosting your own credibility and expertise in the industry.

The upsell in this second interview is the complete telesummit recordings and transcripts, on which you pay them a healthy commission on all packages sold.

A lot of those who have debt were in fact warned about the possible ramifications of the loan. However, whether or not the warnings were sufficient enough is in question. The problem is that these loans were promoted because there were as yet no signs of a dwindling economy. Some have predicted it, but no one wanted to report it because reporting it might hurt the industry needlessly. Now we know that this is not the case.

This is for sure. In fact the economy’s downward trend is only beginning, meaning that there is still a long way down towards the bottom of the pit. But the Obama administration is offering many projects dealing with this. One such solution is loan modification.

People now have a problem with their income. Jobs are unstable. So many people have already been laid off. And to add to all that, the loans are turning to universal defaults.

Calculate your income correctly. You may laugh at this but MANY people miscalculate their own income! Common errors are using net instead of gross income, confusing bi-weekly with semi-monthly paydays and using last tax year’s income instead of the most recent past 90-days.

Even if your loan is more than the value of your home there is no cause to panic. Many lenders who are part of the Obama loan modification program will take these types of loans on.

A bad credit mortgage refinance loan can help you to save your homes from possible foreclosures. Besides, there are plenty of mortgage loan lenders who offer specialized home refinance loans to borrowers irrespective of their credit standing. This makes it possible for borrowers, even with the worst credit history, to secure mortgage refinance loans that cater to their financial requirements. All that borrowers with bad credit need is expert guidance when they are considering applying for such financial solutions.

I took loans from an insurance company and never had to use them to pay for college so I’ve been sitting on the full amount of the loans ever since. it contributed a great deal to my sense of security after I graduated to have the student loan money in the bank.

Get a professional to help. This cannot be understated. The process can be very confusing and getting a professional can help alleviate a great deal of stress and frustration. Professional negotiators go over the needs of their clients and try to reach a compromise with the lender. Professionals understand the details that these financial negotiations demand.

Going to the gym is a great way to stay fit, but it can be both bothersome and expensive. Unfortunately, you probably find yourself going there because you just don’t have the right equipment for your workouts. These exercises will help you stay in shape with little to no use of equipment at all.

Great posting! Very useful information thanks for this.