So with the $40,000 in my savings, I was thinking about paying off all of my UNsubsidized loans which are accuring 4.8% interest rate by the day. I’m not getting anything better by my bank or ING direct. Some say the unsubsized loans I have is considered “good debt”, as the unsubizided interest that accrues is tax-deductible and that you can invest the cash-on-hand elsehwere to get a higher return on investment (I frankly can’t think of anywhere else I can a higher return on investment at this critical stage of our economy). Instinctively, I’d like to pay off my loans to have clean slate.
The stock market looks appealing as today you could have had an intraday (i.e. 1-day) upswing of 20% on your investment and cash out.
What is your take? Pay off my loans, invest my money somewhere,…etc?
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Roy
You don’t want to come out of school with no available savings - not in this economy. If you have a secure job after you graduate, then you’ve got more than enough in savings to put a down payment on a house. Housing market’s down - it’s a good time to buy if you qualify for a loan (which you may not…but hey). You don’t want to get all out on credit after you graduate because you spent all of your savings, and then end up with 12% interest rates on that…because that would be bad…and no job can really be secure at this point in the economy.
Pay off some of your loans by paying the minimum payment, plus some. The plus some now is not accruing interest, and they will eventually get paid off (because otherwise you’re just paying the interest).
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