06 Jul 2021
Is it wise to start investing (those long term ie: index, ETFs etc) while having student loans debt or should I payoff my student loans first before investing?
Investing with student loans debt
In my view, it depends on the interest rate and the amount of the student loans. If you are still clearing your student loans, means you are young. Time is your greatest asset.
If the interest rate is not too high i.e. CPF education loan, you could split between the loan repayment and some investment.
No doubt you can focus on clearing your loans first but the opportunity cost is the time. Not sure how long you expect to take to clear all but I think typically is one to two years?
Myself, I split between the minimum payment to the CPF education loan and doing some investments for a couple of years. Took longer to repay the loan but some of my US stock returns have grown many times more than the loan interest rate over time. It’s tough but cannot say I regretted doing it.
You have to make your own decision. Do consider your cash flow first and always strive to improve your money making ability.
My opinon, clear the loan ASAP before invest. Investment return not guaranteed, but the loan interes...
Read 1 other comments with a Seedly account
You will also enjoy exclusive benefits and get access to members only features.
Sign up or login with an email here
Write your thoughts
ETFs, Equities, Bonds
0.2% to 0.8% p.a.
ANNUAL MANAGEMENT FEE
EXPECTED ANNUAL RETURN
Web and Mobile App
[PROMO] Get 6-month management fee waiver. Valid till 31 Dec 2021. T&Cs apply. Learn more below.