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I feel like paying off my small undergrad loan

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  • Zaphod
    replied




    if you aren’t itemizing (unable to deduct your mortgage interest), you are better off putting the extra 8K to your mortgage which is a higher interest rate and keeping your student loan.   At a 1% higher interest rate, you will save ~ $80 X number of years you are paying off your mortgage.
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    Student loans come with zero benefits. You cant sell them like houses or foreclose on them either. Again, that number is only 2400 maximum, without adjusting for 30 years of inflation, aka, about 1200 bucks so again...small numbers, small real difference.

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  • legobikes
    replied
    Well, I paid it off and feel better.

     

    As far as PSLF is concerned, the system issues don't concern me. What I do know is that prior to seriously considering it (and prior to knowing about it) my impression was simply that I would be paying off my loans for the next 25 years. I didn't know what I would end up making, but when I was seriously considering refinancing it was a given that we wouldn't be able to afford a house, a newish second car, and I wouldn't be able to send money to my mom, and maybe wouldn't have a second kid. I am glad it's around, because all the major milestones in life had already been deferred plenty. As it stands there is risk involved - keeping this same FQHC job for the next 5+ years and saving up in case something happens to the program.

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  • birddog
    replied
    I’d be done with that loan within the hour if in your situation. If you miss having the loan and payments in a month, you can always go get yourself a $8k personal loan and have payments again.

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  • fatlittlepig
    replied




    if you aren’t itemizing (unable to deduct your mortgage interest), you are better off putting the extra 8K to your mortgage which is a higher interest rate and keeping your student loan.   At a 1% higher interest rate, you will save ~ $80 X number of years you are paying off your mortgage.
    Click to expand...


    Come on now, u want a silly little loan like that hanging around longer than necessary?

    Leave a comment:


  • nephron
    replied
    if you aren't itemizing (unable to deduct your mortgage interest), you are better off putting the extra 8K to your mortgage which is a higher interest rate and keeping your student loan.   At a 1% higher interest rate, you will save ~ $80 X number of years you are paying off your mortgage.

    Leave a comment:


  • hightower
    replied




    All that’s left is 8k at 2.6% serviced by Navient, but it just feels like extra baggage. I am gunning for PSLF for my med school loans, but I don’t see the point of dragging along my undergrad loan.

    Also it’s an annoyance because when I re-apply for REPAYE every year, it also sends that request to Navient. I pay $90 monthly now, and I’m tempted to just pull the trigger on the entire loan amount at this point.

    I have 80k sitting in the bank that I’m not doing anything with. We’ll be maxing out our pretax and backdoor Roth with no trouble. Can’t I just pay the dang thing off? I guess the alternative would be to throw it at our mortgage, but I have a feeling we’ll be refinancing that soon from the current 3.65 to a lower rate soon anyway.
    Click to expand...


    It's posts like this that illustrate why the PSLF program needs major overhaul.  Not directed at the OP, but just saying.  It seems kind of wrong that a physician making hundreds of thousands a year and sitting on tens of thousands of dollars should be getting tax dollars to forgive their loans.  Especially when so many people who actually need the help are getting denied for forgiveness.  The whole program needs to be overhauled dramatically.  They need to make the forgiveness process more fair so that 99% of applications aren't denied as they currently are AND I think they should place an income limit on forgiveness of some sort.

    Yeah, of course you should pay off your undergrad loans.  You should also take the rest of that 80k and pay off your med school loans as well.  Everyone else should write to their congressman/woman and open their eyes to how ridiculous the program currently is.

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  • mapplebum
    replied
    Not everyone is as rich and independent as you, FLP.   Pay it off, OP! I agree you won't regret it.

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  • fatlittlepig
    replied
    Strange post. A puny little 8k loan? That’s like a small little ant crawling around Fatlittlepig would squish that without giving it another thought.

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  • Zaphod
    replied
    ? You have 80k in the bank doing what?

    At low nominal balances (esp combined with low rates) theres neither a lot of gain from investing or paying it off. Cant imagine you'd notice the 8k for more than a paycheck.

    Having a loan wouldnt bother me in the slightest, I could not care less, but if it doesnt make a difference then whats the point?

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  • AR
    replied
    Yeah, I was in the same situation (loan amt and interest rate were a bit lower) and I did it.  I did lose a little money, but the justification is that there is some minor hassle involved with having an outstanding loan and the money that I'd gain by paying the minimum and investing the rest did not compensate me for the minor hassle.

    I also currently have a mortgage that is many times higher than your loan at a similar rate. I could pay it off easily, but it's taking discipline not to.    The money I gain from paying the minimum and investing the rest should be substantial, and it would be wasteful not to take advantage.  Believe me, having a mortgage that I don't actually need is quite annoying, but for the amount of money involved, that annoyance is compensated.

    So in the end it's really a cost-benefit analysis.  You've just got to put a realistic price on the annoyance of having the loan.  Then your answer to the question of whether to pay or not is relatively straightforward.

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  • wideopenspaces
    replied
    You have my blessing.

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  • Peds
    replied
    You should have done that 72K ago.

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  • Lordosis
    replied
    Git rid o the ankle biter!

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  • CordMcNally
    replied
    Do it. You won't be sorry.

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  • Panscan
    replied
    Yes who cares get rid of it

    Leave a comment:

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