Question about repaying student loan

[agenda]

Currently in a local uni, burdened with a total loan of about $13,000. So I did some calculations as to how much and how long I would need to pay off my debt with the interest at 4.75% (does not incur until i start working)

So I calculated that if I choose a 4 year plan, I would need to make $300 * 48 monthly repayments to repay a total of about $14,350 while a 3 year plan at $400 * 36 would see me pay off $14,050. The intuitive way is of course to be debt free.

That said, the reason why I wanna to reduce the monthly repayment, is to build savings, at least an amount that I'm comfortable with.

As long as my money put into investments are earning me more than 4.75% in returns, it doesn't matter if I repay in 36 or 48 months right? As long as my returns can exceed interests, my ROCE would be efficient. Anyone care to advise?

 

[Perisher]

Currently in a local uni, burdened with a total loan of about $13,000. So I did some calculations as to how much and how long I would need to pay off my debt with the interest at 4.75% (does not incur until i start working)

So I calculated that if I choose a 4 year plan, I would need to make $300 * 48 monthly repayments to repay a total of about $14,350 while a 3 year plan at $400 * 36 would see me pay off $14,050. The intuitive way is of course to be debt free.

That said, the reason why I wanna to reduce the monthly repayment, is to build savings, at least an amount that I'm comfortable with.

As long as my money put into investments are earning me more than 4.75% in returns, it doesn't matter if I repay in 36 or 48 months right? As long as my returns can exceed interests, my ROCE would be efficient. Anyone care to advise?

Debt of this nature is best to pay down asap. You don't wanna invest with a die die must earn 4.75% mentality, it would hinder your decision making.

When investing, it should be with $$ that is free of any need, that includes eat/home/transport/loans etc...

 

[shareholder]

Debt of this nature is best to pay down asap. You don't wanna invest with a die die must earn 4.75% mentality, it would hinder your decision making.

When investing, it should be with $$ that is free of any need, that includes eat/home/transport/loans etc...

Agree with Perisher, paying monthly installments can be stressful. It will slowly wear you down, unconsciously affecting your mental and physical health.

 

[Shiny Things]

Currently in a local uni, burdened with a total loan of about $13,000. So I did some calculations as to how much and how long I would need to pay off my debt with the interest at 4.75% (does not incur until i start working)

[...]

As long as my money put into investments are earning me more than 4.75% in returns, it doesn't matter if I repay in 36 or 48 months right? As long as my returns can exceed interests, my ROCE would be efficient. Anyone care to advise?

Nope, you want to pay this down as fast as you can. 4.75% is not a particularly low interest rate, and trying to "build savings" while you're paying off high-interest debt is not a smart idea.

 

[Bedokian]

As what others said here, this debt has to be cleared off, firstly to have a fresh head start in your financial planning, and second the interest rate is a big killer.

I believe you will have internships and chances to get a holiday job during breaks. Try to earn some dough during these times and you can either pay off the study loan partially or treat it as base for your savings. The moment you come out to work, you will have enough to allocate the pay for savings, study loans and other expenses.

 

[mcylo]

when i first graduated, every month chiong student loan $800 repayment....After working for 1 year finally repaid OCBC study loan.....but my savings was........

Would advise TS to repay loan asap.