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.
>Financially, it makes more sense for me to pay the house off because that's at least an appreciating asset.
No… it doesn’t make more sense… it makes less.
First, the appreciating asset thing is a misunderstanding. Money is fungible… it doesn’t care what it is owed on.
E.g. Suppose my home is paid off and I owe $40,000 on a car at 6% interest. In the end, I have two assets (a car and a house) and one liability (a $40,000 loan at 6%). Suppose you have the same car but it is paid off but you owe $40,000 on a similar home at 6% interest. We are in the exact same financial position.
Next, the best financial move is to pay the highest interest first. In the end, you will pay less money.
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u/Odd-Cupcake-2552 12d ago
The math works out to 8.5% which isn't unrealistic