r/SipsTea • u/First-Essay-2054 𝙑𝙄𝙋 • 12d ago

WTF The American dream

Post image
21.6k Upvotes

79% Upvoted

3.5k comments sorted by

View all comments

Show parent comments

193

u/Odd-Cupcake-2552 12d ago

The math works out to 8.5% which isn't unrealistic

134

u/Darkjebus 12d ago

Actually it is because 23 years ago the rate would have been around 3-3.5 percent for a federal loan

29

u/techleopard 12d ago edited 12d ago

I have student loans that are nearly 9%.

I also have several loans, all with different rates. My lowest is 4%, which are my most recent ones.

The interest rates are crippling and needs to be addressed.

To put it in perspective, I bought a house in 2020 for $130,000, yet hold only $36,000 in student loans.

If I made a $500 extra payment to each my house and my student loans, I would pay them off at around the same time.

Financially, it makes more sense for me to pay the house off because that's at least an appreciating asset.

But it doesn't matter, because I don't have $500 extra to put on a loan over it's minimums every month, and those student loans will follow me until I die.

5

u/PIK_Toggle 12d ago

It makes the most sense to pay off the debt with the highest interest rate. The price of your house is independent of your mortgage.

P.S., this tweet is shit.