REVscene Automotive Forum - View Single Post

lowside67 · 01-23-2017, 02:48 PM

First, she absolutely MUST repay $2k to Provincial and $5k to Federal student loans. Being out of compliance will risk her credit and given that she has cash in the bank, this is a no brainer.

The decision on whether to spend her remaining $9k against her loans or leave it invested is made by whether she thinks she can earn more than her interest rate in the investment world. At 5.2% for her debt, the decision is easy - she should make a further lump sum to repay debt further.

She should make sure she has an "emergency fund" left over and that she needs to figure out herself as it would be based on many things - does she live at home, does she have a spouse who works, etc.

$16k - $7k repaid - emergency fund = ???

??? should be immediately paid as a lump sum against her loans, if they had different interest rates then obviously the higher interest cost, but if the same, it doesn't really matter. In my opinion, she could probably almost repay the provincial loan entirely which would simplify things down to one loan soon which is always good.

Mark

01-23-2017, 02:48 PM	#3
lowside67 Old School RS Join Date: May 2004 Location: Port Moody Posts: 4,641 Thanked 4,157 Times in 1,262 Posts Failed 130 Times in 80 Posts	First, she absolutely MUST repay $2k to Provincial and $5k to Federal student loans. Being out of compliance will risk her credit and given that she has cash in the bank, this is a no brainer. The decision on whether to spend her remaining $9k against her loans or leave it invested is made by whether she thinks she can earn more than her interest rate in the investment world. At 5.2% for her debt, the decision is easy - she should make a further lump sum to repay debt further. She should make sure she has an "emergency fund" left over and that she needs to figure out herself as it would be based on many things - does she live at home, does she have a spouse who works, etc. $16k - $7k repaid - emergency fund = ??? ??? should be immediately paid as a lump sum against her loans, if they had different interest rates then obviously the higher interest cost, but if the same, it doesn't really matter. In my opinion, she could probably almost repay the provincial loan entirely which would simplify things down to one loan soon which is always good. Mark __________________ I'm old now - boring street cars and sweet race cars.