/ Ask Terry Questions / Student loan payoff

Student loan payoff

By Terry Savage on November 07, 2021 | College Savings / Student Loans

My daughter’s student loan is about $40,000, with a monthly payment around $600. She has about 7.5 years left on the loan with $14,500 @6%/$21,000@5.3% and $4,200@ 3.86%. Her monthly expenses are around $2,000 and her take home pay is about $4,300 per month. She has about $63,000 in her savings account. Should she pay her loan off in it’s entirety or should she pay down as much as possible before February2022 when the loans has to be repaid again(that would lower het monthly payment)? It took her about 2.5 years to save the money she has in her savings?

Terry Says

First of all, I’m impressed that she has managed to save that much! What was her inspiration? I’m asking because if she doesn’t have a specific goal, then YES, PAY DOWN ALL THOSE STUDENT LOANS! Her savings are paying less than 1% — and her loans are costing her a lot more in interest! And from my math, she would still have about $20,000 left for emergencies, or to continue her savings plan.



a personal
finance question