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Originally Posted by Broken Arrow
Also, please note that paying down a 5% loan is not the same as saving it in a 5% interest savings account, because the interest on latter is taxable. (5% of 20k comes out to a nice, round 1k. So, depending on your taxes, it could be a difference of $200-$300 each year.)
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The inerest earned is taxable, but don't forget that the student loan interest paid is tax deductible (in most cases). So this is pretty much a wash.