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Should I pay off half of my student loan right now?

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I don't have that much in student debt, just a little less than 6k. I still live with my parents for free so I don't have any real expenses. I bring home a little less than 2k a month (after taxes, company insurance, and 401k). And have 6k in the bank right now. I also have other miscellaneous debts because i'm on probation but they only amount to 1k at most. So far I've been paying about 200 a month more or less towards the loan. So what do you guys think should I just make a large payment like 3000 towards the loan right now?
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>>1717900
well depends if you can reduce the principal part of the loan without penalty the sooner you pay it off the better you are long term.

on the other hand liquid savings as emergency funds are very important.

and if your student loan has very good rates so goo in fact that investments beat it then don't pay it off.
>>
What are you other debts and how much are they?
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>>1717909
I pay about 3.15% on the loan. Yeah the whole emergency fund aspect is the only thing holding me back, however I live with my parents, other than some sort of car accident happening, I can't think of any emergency that I could be liable for.
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>>1717921
well next question can you invest your 6k in a fund that makes 7% or above?
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>>1717913
Well I have to pay like $30 a month to my probation for probably 10 more months at least. I also have pay $500 driver assessment civil fine to the DMV. Then there's just things like buying gas, food, entertainment things, and train tickets every now and then.
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>>1717935

First, you need to set 1k aside just for your legal stuff and don't touch it until you get passed that. Getting that taken care of is more important than your loans right now.

This leaves you with roughly 5k left and 2k in monthly income

I would recommend putting 4k down on the debt, which will lower it to roughly 2k.

This leaves you with a 1k emergency fund.

Then up your monthly payment to either $400 or $500 a month, or even higher. The more aggressive you get the faster you can get this taken care of. If you put $600 a month into this, you'd be done in less than 4 months and then you're free to rebuild your savings.
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>>1717976
Good idea man Thanks I like that.
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>>1717976
Second this. /biz/ actually delivered. Im proud.
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>>1718250
i wouldn't do that tho. 1k is not an emergency fund it's pocket change.

i agree with the legal stuff, but i would keep at least 3k emergency fund. that means $2k down payment now, and even that only if i can't put it into some nice index funds.

if you can't make investments beat it then paying off a debt is your best investment. but i think you can actually do a lot better than 3.15% with a little effort.

op pays 200 a month that means 2.4k a year that means in 2 years most of his debt will be gone. that's good, and if he can up it to 400 a month his savings would remain and it would be over in a year or so. that's what i would do i think.
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>>1718275
Its a 2 stage emergency fund.
Part 1 is 1k for oh shit stuff.
Part 2 is 3-6 months of expenses after debt is gone
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I've got over £30,000 student debt but the interest rate isn't that large so I'm in no hurry to pay it off. Easy to ignore

OP, why bother paying it off at all?
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>>1718324

>why bother investing when the interest rate isn't that large and i'm in no hurry to make money?
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>>1717900
Everyone suggesting that you should accelerate your loan payments are extremely risk adverse.

The most reasonable thing to do is invest that money conservatively b/c beating a 3.15% is trivial. And the effective rate is less, b/c you get do deduct the interest on your taxes.

If you don't need the money, you should take 5500 and put it in an index fund in a Roth IRA and forget about it.
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>>1718347
People sleep better when they dont have any debt.

Stay frosty though
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>>1718347
True, but knowing that carrying that particular debt is the best decision when opportunity costs are considered should function as a sedative.
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This:
>>1718389
was in response to this:
>>1718387
>>
If you have an actual question about personal finance go to /r/personalfinance

I would never listen to some random frog posting retard on this site. This site is good for memes and laughs
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Lmao why even pay its going to be forgiven under Trump
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>>1718402

underrated post
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>>1718347
>>1718387
>>1718275
>>1717976
I decided not to take it as far, I decided to pay $2025 down (the extra 25 because I had a $75 credit card balance which I also paid). Now I'll have less than $4000 in debt. And yes I think I'd like to open up a Roth IRA, I think I'd probably beat 315% just indexing...
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>>1718835
*** 3.15% I mean *** 315% I wish
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>>1718434
What makes you think Trump is going to forgive student loan debt?
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>>1718297
Yeah to me the most important reason to have an emergency fund is if someone was renting and or paying utilities and then suddenly they became unemployed. or Even worse got injured or into some kind of car accident. Luckily I don't have to worry about living expenses because I'm a neckbeard and I still live with my parents. So I decided not to pay down 4000 but 2000 instead.
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Op lives with his parents. 1k is more than enough for an emergency fund.

Unless he's paying rent and utilities, then anything more is overkill for savings.

Why spend 2 years paying such a small amount, when he could just knock it out in three months and have all of his money going back to investing and saving.

He misses compounding on 3k for 3 months, it's nothing. That 2.4k he would be paying over two years gets to get invested and compound instead.
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