Personal Finance

3829 readers

1 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 1 year ago

MODERATORS

[email protected]

Pay off student loan debt or invest? (self.personalfinance)

submitted 1 year ago by Copernican to c/[email protected]

13 comments fedilink hide all child comments

Is there a general rule of thumb on student loan interest rates and whether or not it's better to pay off ASAP vs invest in an index fund? Sold a lot of company stock from an ESPP and RSU program that happens to be the value of our household's student loan debt that is just entering repayment after graduation. Can't tell if a 5 or 6% is worth drawing out or paying off in one go. Not worried about rainy day or emergency fund and already maxing out my retirement. So really it's a question of debt payoff or non retirement investment.

you are viewing a single comment's thread
view the rest of the comments

[–] sevan 0 points 1 year ago

Paying off your loans gives a guaranteed tax-free return, which is very hard to beat on a consistent basis. Obviously you can get lucky with market timing, but I prefer the guarantee. It also increases your monthly cash flow, which you can start investing.