04 Aug 2020
Graduated poly in 2019, was working full-time, recently retrenched. Have been planning my finances ahead since I started working and would like to know if it's better to put my money into investments or to pay off the school fees upfront.
Currently have 5k poly loan, 10k savings, 2.3k in investments (STI ETF, Stashaway, Saxo, Vickers). Planning to continue working, likely to save 20k more before uni in 2022, and will have 20k in 2021 from a savings plan parents bought for me. So 50K total!
I cleared off my poly debt one shot. It would be accumulating an interest repayment rate of 2.1%, so I just cleared it one lum sum as I there's no point saying money in an account that woul get you 2% interest when you money is still getting eaten away by the student loan.
As for university, consider applying for financial aid or scholarships. There's even a scheme in some local schools that offer a student loan, and interests only starts immediately after graduation. I think that'd be you best choice.
Like many said, I think it'll be better to clear it off at one shot too, to prevent the interest from accumulating each year. Furthermore, it's hard to have investments thats would yield you at least 4.75% each year.
I suggest you start a StanChart JumpStart account since you'll be between the age of 18-26. This account allows you to generate an interest of 2% per annum for your first $20k. It has a really good interest rate that many banks are unable to match!
Hey Anon, I'd suggest clearing the poly loan first to reduce the amount of interest payable over the long run. As for your university tuition fees, it'll be good if you have upfront cash to pay off the fees. But since the loan is interest free during the course of your study, I'll take the loan and put it in a high interest savings account to generate some additional interest and pay it off in one lump sum upon graduation to not incur any interest payable on the loan.
I think its more prudent to pay your loan slow, and with spare cash in your account. This way you have more cash and also able to invest in the market when the opportunity arises.
UIpfront cash is good, but if you don't have the cash, go for the lowest rate education loan you can find.
If you take university loan for local university, they are interest-free till you graduated, and eve...
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