Here is a little run down on my situation. I have a private student loan that has a balance $34206.56 and a interest of 4.98% that changes every three months. Starting this month I am paying $500 a month on it which is a little over one hundred more than the payment. I also save $250 a month into a savings account. I am wondering if I should continue to save or put more money on my student loan or save more money?
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Paying down debt is important, but it's also very important to have cash savings. If you're making double-payments on your SL's as it is, keep with your current pace of saving. Security is worth dragging out a loan for a little longer, IMO.Originally posted by skives View Post"Praestantia per minutus" ... "Acta non verba" -
Kork gave decent advice. Nowhere did you post if you were saving for retirement, what your budget looked like and the amount IN the savings account.
Is 15% of your gross pay going to a retirement account (IRA, 401k or other)?
Do you have 3 months expenses in cash?
Do you have a budget?
Do you have other debt (like a car payment or cc)?
All of the above should be done before you pay extra on the SL debt.Comment
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I don't know your full situation, but if it were me I'd make sure my smaller debt, cars, credity cards etc... were paid off first. Then I would make sure I had about $1,200 in emergency cash in a money market account, and if possible 3-6 months income set aside, as well as set at least 10% of my income to go into a retirement account. Then I would take any extra and dump as much as possible toward atacking the larger debt. Good luck!Comment
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I put 12% of my gross pay into a 401k. I have an emergency savings with $1,000. I have another savings with $4,000 in it and put $250 a month in it. I have no other debt besides a federal student of $33,000 but my payments on that are going to go soon because of a new payment plan. However I only make $13.40 an hour for 40 a week plus any overtime I get. That should help out.Comment
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Additional Info
I meant to say are going to go down when I switch into the income based repayment to around $70 a month for the federal student loan.Comment
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If you are secure in your job, and do not have any important expenses(house,car) in the near future, I would put the 250 towards your SL.
You will save 4+ interest as apposed to earning 1 to 2%.Comment
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i am agree with maat. it's also very important to have cash savings.Originally posted by maat55 View PostComment
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