Recently got my first big stock dump from my company. I can reinvest it, or spend most of it on paying off my loans. If I keep making minimum payments on my loans, they will be paid off in 3 years. Car and private student loans at 4.14% and 4.79%, respectively.

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micha8st t1_jegmvwu wrote on March 31, 2023 at 9:40 PM

do you like your loans?

Howabout you split the difference: pay double the minimum on your loans.

We always paid extra towards principal for our car loans and the mortgage.

bj1231 t1_jegyt8s wrote on March 31, 2023 at 11:07 PM

I think you need to research the cost of the loan versus what you can do with the money that you have saved. For example can you invest in the stock market now and look for a big upturn in the stock market in the lyrics to and therefore make more money than the cost of your loans.

A quality decision needs a little more research and a little pencil work

scrooooooooooge OP t1_jegohxv wrote on March 31, 2023 at 9:51 PM

That's a good idea.

satans_toast t1_jego1ac wrote on March 31, 2023 at 9:48 PM

Can you pay off any one loan completely? If you can, do it and get that satisfaction. If not, I like the other idea of doubling your payments in those loans.

scrooooooooooge OP t1_jegoh3d wrote on March 31, 2023 at 9:51 PM

I could pay off both completely, but it would dwindle my investment money (leave me basically just with my emergency fund)

satans_toast t1_jegpiuf wrote on March 31, 2023 at 9:58 PM

Pay off one debt. Get some cake to celebrate.

Qylere t1_jeh2aqv wrote on March 31, 2023 at 11:34 PM

Pay it off. Then all your money is yours. Plus you’ll feel amazing as a debt free human

Bear_nuts t1_jeh3oqi wrote on March 31, 2023 at 11:45 PM

Depends , can you make investments that can pay off your monthly principle and the insurance on top of it ? If not pay it off until you can get to the point where the money you get from investments takes care of your payments though investments, otherwise just pay it off

PersephNoob t1_jegkpt5 wrote on March 31, 2023 at 9:24 PM

Pay off your car, it’s a no risk way to make 4.14% on your “investment” if you know what I mean and any competent person would take that. Same with student loans since their is no chance of forgiveness.

DifficultyNext7666 t1_jegyolz wrote on March 31, 2023 at 11:06 PM

Except you can literally put that same money in a savings account now and make more than that

cakeandale t1_jeh2k23 wrote on March 31, 2023 at 11:36 PM

That’s generally good advice, though for right now 4.14% is near the balance point for savings vs debt. Savings interest is taxed as income, and if OP is in the 22% tax bracket ($44,725-$98,375) they’d need to get 5.3% interest to breakeven post-federal-tax (likely slightly higher depending on state taxes).

PersephNoob t1_jeh13ma wrote on March 31, 2023 at 11:25 PM

Show me a savings account making 4.79%, and your not considering the simple risk of debt.

DifficultyNext7666 t1_jeh1t28 wrote on March 31, 2023 at 11:30 PM

You said car. And I can easily show you a savings account making 4.5. And pretty soon I'm sure we'll see them over 5

PersephNoob t1_jeh1x79 wrote on March 31, 2023 at 11:31 PM

Whatever man, stay broke with all your “good” debt.

scrooooooooooge OP t1_jegl24t wrote on March 31, 2023 at 9:27 PM

Yeah that's true I guess from the perspective of me already paying them off at that rate, it would be a 4+% "investment"