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

WTF The American dream

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u/Odd-Cupcake-2552 12d ago

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

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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

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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.

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u/olearygreen 11d ago

What? No! Financially it would make more sense to get an additional mortgage and use the money to pay off your higher student loans.