I'm currently in grad school abroad (fully funded phd), so my undergrad fed student loans are on deferment until late 2028…But I've recently discovered that because they are unsubsidized, they're accruing interest!
Two years ago when I went into in-school deferment and enrolled in the SAVE plan, I had 18.5K in debt – now I have 20.5K!
I have four separate loans with diff interest rates (~3.7%, 4.5%, 6.9%, 6.8%) – with similar amounts of balance on each (4.3-4.8K debt each)
I have an investment account with about 5K invested. Apprently it's done pretty well over the last year (about 25% growth).
I have also been putting away around 400$ per month into savings accounts.
I'm so lost as to what the best long-term strategy is here.
Would I best best off 1) trying to pay off the highest-rate loans (6.8%) with the 5K I have invested, and then 2) trying to put at least something (maybe 200$) into monthly payments to avoid the interest accruing on the remaining loans).
Of course this means I'll have a very small savings safety net if something goes wrong which is why I've avoided paying off anything big so far, but I'm starting to reconsider my strategy.
Posted by 85131729
1 Comment
Mathematically the best approach is to pay down the loan with the highest interest rate first. How much longer will you be in grad school? Your loan balances are pretty low and if you don’t have much of an emergency fund, I would focus on beefing that up first.