facebookStudent Loan vs Investment some quick b/g - 118k med sch student loan - Have savings to pay off ~55k before interest starts in 1 years' time; E fund intact - 63k left, interest was 5.25% Dec 19? - Seedly

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Anonymous

03 Mar 2020

Property

Student Loan vs Investment some quick b/g - 118k med sch student loan - Have savings to pay off ~55k before interest starts in 1 years' time; E fund intact - 63k left, interest was 5.25% Dec 19?

I aim to pay off my loan in 2-3 years depending on route chosen below.

Need some advice please, should I split income:
1. All expenditure + student loan (no ^ in savings for 2-3 years; will have E fund)
2. All expenditure + student loan + RSS for ETF (around $200)

Also have 1 year before I start work / interest:
3. Should I put ~$1-200 per month x 12 months into RSS now ie interest free period? Will compounding over 10yrs > interest paid from less $ for upfront payment & longer loan repayment

Discussion (9)

What are your thoughts?

Joe Lee

Joe Lee

03 Mar 2020

Level 7·Adventurer at Game of Life

Without a doubt, CLEAR YOUR DEBT ASAP.

You should not be investing before

1) Clearing all your high interest DEBT (Credit card debt/ student loan)

2) Saving up your emergency fund, 3-6 month of expenses is a good amount to start.

3) Get your insurance sorted out (Hospitalisation plans/term plans etc)

Get your financial priorities right and everything else will fall nicely in place

View 1 replies

Pang Zhe Liang

Pang Zhe Liang

03 Mar 2020

Level 14·Senior Financial Services Consultant at AIA Singapore Private Limited

My stand is simple - clear the loan as soon as possible. This is because the interest rate from the loan is guaranteed while any form of investment yields only non-guaranteed return.

While there may be concern on opportunity cost, the greatest opportunity cost is nothing more than your fear of missing out.

Therefore, create a proper budget and aim to clear the study loan as soon as possible. Thereafter, use the fresh budget from the loan repayment to invest. I'm confident that you will do better at the end of the day.

In case you are wondering, I am a strong advocate for automating my budget. Here is how I do it: https://www.blog.pzl.sg/how-to-create-a-monthly...

Here is everything about me and what I do best.

View 1 replies

Hariz Arthur Maloy

Hariz Arthur Maloy

02 Mar 2020

Level 15·Independent Financial Advisor at Promiseland Independent

If you want to clear it off within 2 to 3 years, spend all your money clearing it. There wouldn't be...

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