Student Loan debt

[involuntary tentacle]

I have a certain amount of student loan debt left to pay off, but once paid.. I SHALL BE DEBT FREE.
Would it be worth it to pay off this debt now?

If you had a certain amount of gold and silver sitting around to pay this debt off, would you trade PMs away to become debt free?

You could give up all your gold, and a little bit of silver to pay it off.
Or you could keep the gold you have, and sell off a large chunk of silver.

Just trying to see which route people would take if they were in such a situation.

[Morsecode]

Depends on the balance & interest rate. But, if that's really your only obligation I certainly wouldn't sell pm's to pay it off. What's the hurry?

[involuntary tentacle]

What's the hurry?

Dont want anything following me when I leave.

[galenrog]

To borrow an old adage: "Debt is servitude". While I do not advocate liquidating any significant portion of you PMs, I do believe that a prudent person rids themselves of debt as soon as circumstances permit. I advocate you first have an emergency fund equal to or exceeding six months of all your expenses. If you have sufficient funds after this, and adequate income, then by all means pay off your loans and kick Sallie Mae out of the house. I know that the interest rate is low, but if this is indeed the only debt you have then I believe it may be best to rid yourself of it and put what you would have paid every month into PMs or other long term plans you may have. This is my opinion based on your original post. May you make the decision that is right for you.

[Mossy]

With a regular source of income and no significant expenses on the horizon, and not relocating, I'd not sell anything, but keep to the payment sched. Then again, I regard most education these days as fraud and over priced, and I'm very bullish on metal, so I would expect the value of metal to increase more than the interest rate on the loan.

But, you said something about debt following you. In that case, I'd seriously consider selling some PM to cut "baggage".

[marblerye]

I have student loan debt (reasonable balance at a fixed rate of ~2.2%) but I'm in no hurry to pay it off. I figure inflation will eat away at the real value of that debt so I only pay the minimum payment every month. I can certainly get a better than 2% return on my money in other places. The idea that debt is immoral or wrong or that it should be avoided at all costs is incorrect. Inflation is a debtor's best friend.

[Mossy]

Inflation is a debtor's best friend.

Especially the ones elected to office.

[Morsecode]

Ok, so it sounds as if this is more than a purely financial decision, and your emotional comfort zone can't be computed on a calculator. Hey, that's fine, too. Debt free has it's rewards.

Still...is there any chance of adding to your present payment schedule to shorten the term?

[involuntary tentacle]

With a regular source of income and no significant expenses on the horizon, and not relocating, I'd not sell anything, but keep to the payment sched. Then again, I regard most education these days as fraud and over priced, and I'm very bullish on metal, so I would expect the value of metal to increase more than the interest rate on the loan.
But, you said something about debt following you. In that case, I'd seriously consider selling some PM to cut "baggage".

yeah, the student loans are old and are almost paid off. but i am looking to make manuvers between now and before next summer.

as for the baggage... i would become debt free and would basically only be taxed on the income of 2011.
the student loans are basically owned by the government and cant be discharged in any other means than paying it off.
id like to have them paid off, so when i "leave" it will be a clean getaway, since i apparently dont make enough for them to tax me for 10 years after i "leave"

Still...is there any chance of adding to your present payment schedule to shorten the term?

not really. which is the reason for contemplating the immediate dismissal of the debt by sacrificing some metals.

[NDFarmer]

so when i "leave" it will be a clean getaway, since i apparently dont make enough for them to tax me for 10 years after i "leave"

You are being very cryptic about LEAVING. I didn't know that if you don't make enough money one year not to be taxed that, that gives you a pass for 10 years not to pay any taxes.

[Rodebaugh]

Up to $2500 in Student loan interest is tax deductable If your income isn't to high........so no and hell no.....keep that debt.

[OldPeddler]

It looks to me, if you won't make enough to pay income tax for 10 years, the investment in the schooling, was a waste of time and money. Better take the time paying it off and eat good.

Just an Opinion.

[balz]

I have student loan debt (reasonable balance at a fixed rate of ~2.2%) but I'm in no hurry to pay it off. I figure inflation will eat away at the real value of that debt so I only pay the minimum payment every month. I can certainly get a better than 2% return on my money in other places. The idea that debt is immoral or wrong or that it should be avoided at all costs is incorrect. Inflation is a debtor's best friend.

Same for me.

I prefer buying real money than repaying fiat currency.

[JobIII]

Hi IT,

I think the act of paying off your debt in full depends on a couple issues. Basically how much do you owe, and what is the interest rate. Is that rate fixed or variable. If you are paying more that 4% I would make it a priority to pay down these loan groups first. Variable and fixed at <3% for the time being should be seen as less important. Variable rates change 2x a year.

I was considering paying off all my loans in full last year. I decided against it. I started paying ~ 6x the min payment for some and still pay the min for others. You can always spend the money now, but if you were to need it for an investment or emergency over the next 5-10 years you'd be out of luck.

Also look into amortization calculators online (or in excel if you're savvy). A simple formula can be created to see exactly your savings in the long run depending on your monthly, yearly payments. Seeing the savings / costs of your preferred payment schedule should be helpful. You may also see that saving 8 grand over a 120 month payment plan isn't really all that great for you.

for example a $30k loan at 120 (10 year) payments will cost you $8.2 in interest
A $30k loan paid over 1 year will cost you 800 in interest

What would you prefer to do? Spend $30K of your savings right now, or spend $30k over 10 years + $67 per month...



Also it looks like the loans are old, you aren't probably paying a lot each month towards interest... You stand to benefit the most by paying more to loans at the beginning. Really check out the free online loan calculators. It may still end up that you pay the remainder off in full now.

On a side note, if they really are almost paid off. Personally I'd use money from my savings to pay the remaining balance, not PM's. If you don't have savings available and you're not getting paid from a job, then it's really up to you. PM's are on a high right now, that could go up or down (regardless what people here tell you ). Also if you leave the country most Loan programs now have payment plans set-up online. And if you're out of work for government loans, look into unemployed deferment / Loan forgiveness.

~JobIII