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I feel like paying off my small undergrad loan

Home Student Loan Management I feel like paying off my small undergrad loan

  • legobikes legobikes 
    Participant
    Status: Physician
    Posts: 301
    Joined: 05/25/2017

    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.

    #237605 Reply
    Avatar Panscan 
    Participant
    Status: Resident
    Posts: 1152
    Joined: 03/18/2017

    Yes who cares get rid of it

    #237606 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 3073
    Joined: 01/03/2017

    Do it. You won’t be sorry.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #237610 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 2222
    Joined: 02/11/2019

    Git rid o the ankle biter!

    “Never let your sense of morals prevent you from doing what is right.”

    #237612 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4715
    Joined: 01/08/2016

    You should have done that 72K ago.

    #237615 Reply
    wideopenspaces wideopenspaces 
    Participant
    Status: Physician
    Posts: 1213
    Joined: 01/12/2016

    You have my blessing.

    #237617 Reply
    Avatar AR 
    Participant
    Status: Physician
    Posts: 873
    Joined: 03/10/2016

    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.

    #237650 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6339
    Joined: 01/12/2016

    ? 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?

    #237872 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1313
    Joined: 01/26/2017

    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.

    #237881 Reply
    Avatar mapplebum 
    Participant
    Status: Spouse
    Posts: 330
    Joined: 04/17/2018

    Not everyone is as rich and independent as you, FLP. 😉  Pay it off, OP! I agree you won’t regret it.

    #237883 Reply
    Avatar hightower 
    Participant
    Status: Physician
    Posts: 1501
    Joined: 12/07/2016

    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.

    #237886 Reply
    Liked by ZZZ, AZPT
    Avatar nephron 
    Participant
    Status: Physician
    Posts: 288
    Joined: 05/09/2019

    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.

    #237906 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1313
    Joined: 01/26/2017

    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?

    #237928 Reply
    Liked by Lordosis, AZPT
    birddog birddog 
    Participant
    Status: Physician
    Posts: 35
    Joined: 02/05/2019

    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. 😉

    #237934 Reply
    Liked by Lordosis
    legobikes legobikes 
    Participant
    Status: Physician
    Posts: 301
    Joined: 05/25/2017

    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.

    #238283 Reply
    Liked by Peds

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