To pay off or not to pay off?
Hey Monkeys -
Was fortunate to have a solid year this year and will be able to pay off what's left of my undergrad loans as well as all of my B School loans (think $150k+ combined).
Curious as to what some of the guys/gals on this forum are doing - did you invest your excess liquidity and make min monthly payments or clear off your school loans in one go? Can definitely deploy into the private/public markets but wondering if I should just take care of it now or later.
Thanks everyone.
I wouldn't pay it off - yet. See what happens with this administration. They keep extending the loan forbearance. Maybe it will get wiped away completely. You never know. If a new administration comes into play by 2024 (namely Republican) then I'd go ahead and pay it off. I have about $17k in student loans and am going this route.
TY much - good point.
This only applies to Federal loans though. I'm doing this strategy for my small Federal loan, but my private ones from b school have been in payment for a year now and Biden can't really do much for those (outside of Congress just passing a debt Jubilee).
Yeah, I paid off the last little bit of my undergrad loans in early 2020. The Peace of mind was nice, but I wish I had throw that cash in a investment account. Would have been up about 10% which honestly would have covered the payments.
I don't think this realistically is going to happen. BBB is full of a ton of shit and this wasn't touched
You can refinance these loans to very low interest rates at the moment to the extent they are not already. I think I’m paying something like 2-2.5% with a short term variable loan and plan to pay this off if the rate rises meaningfully. In the meantime have invested the cash.
A partner in a hedge fund asking if he should pay off his student loans or invest in other assets….What is this world coming to
Didn’t realize that being a partner in a hedge fund made me a know it all and eliminates the need for me to get different views on topics.
How’s performance for you this year, btw?
I mean - 1) it's surprising you still have student loan payments outstanding. Assuming it took you more than 3 years to get to this level and 2) I feel like everyone, including you from your OP, knows about the opportunity cost and looking at the interest rate of the loan vs. the ROI of other investments.
Just sort of random that's all.
P&L-wise idk man, could definitely be better. Could be worse too I guess. Looking to finish out the year HSD net. Were on track for LDD but PM took the gas off some of my longs early. You know how it is.
In the spirit of adding value though. I'm always in favor of keeping debt in my life and investing in the stonks for anything sub 7% (higher hurdle than most will take but I'm aware I'm just more risk-prone). Go to First Republic and they'll refi your loans for like 1-2% cuz they're desperate for your business. Lots of friends have gone down this route for their loans.
4 years to get here, but pushed it off significantly because I just didn't want to pay it. COV also helped since everything is in forbearance - and talks of wiping out student debt (be it real or not) also pushed me off from doing anything. I get opportunity cost / ROI of other investments - just super debt averse and hate having it on my books. Mentally messes with me.
I hear you re: performance. HSD isn't bad - better than flat or down.
yo in the same exact boat here. My wrinkle is that while like yes in theory it would be great to keep the debt balance and start really working the PA, I also hate how living with debt feels and feel like it has limited my risk appetite in life quite a bit
Any clue how much better re-fi rates actually would be for MBA + undergrad in your shoes? If 2-4%, that feels like an insanely easy hurdle, but if more than that, I feel like I'd rather just pay off the debt
How can we answer when you don’t include the internet rate on your loans, the minimum payment and your other debt?
If you could include a SSN and photo copy of an ID too that would be helpful. Will send the DD tracker across later today.
Had the choice between paying my B-School in full or taking a loan and investing. Best decision of my life to do the latter....
I love free money.
Why wouldn't you just keep extending it ? Time value of money and delaying it means you are paying a cheaper amount. I would just open up a checkings account and deposit the funds that could pay off that loan amount and then never dip into it at all.
Also assuming student loans are interest free ? That is what someone told me
They are in forbearance right now. Eventually people will probably have to pay off their loans.
Just pay it off. You'll never have to think about those loans again.
My logic? I hate debt. I guess it's more emotional.
Maybe a better question: what is the interest rate below which you wouldn't pay it off?
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