Best Tricks for Paying off Student Loan Debt | Mint Student Finance Tips Video


Transcript

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This question comes from Cory on Mint’s Facebook page.
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And this is Cory’s question.
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What is the best way to pay off $32,000 of student loan debt?
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Cory that’s a very good question.
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It really depends on the interest rate
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that you’re paying on that student loan debt.
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There are certain types of student loans that have very,
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very good interest rates– 2 1/2%, 3 1/2% and in many cases,
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that interest is tax deductible.
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I would not accelerate a pay back of those loans
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by taking money out of another type of investment,
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and especially I would never break into a 401K
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to pay off that kind of loan.
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However, there are types of student loans
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that have fairly high interest rates,
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so really it’s a matter of budgeting.
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You put more of your discretionary funds
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at the end of the month towards the principle of that student
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loan and you’d be surprised just how
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quickly you could pay it off.
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I’ll give you a great example to quantify it.
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$32,000 is not terribly different than what
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you would pay for an auto loan, and most auto loans
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can be paid off in 36 months to 60 months,
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so you should be able to knock that debt off
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within the next five years.
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