facebookWhat should be my priority? Paying off my student loan or start investing? - Seedly



28 Sep 2019


What should be my priority? Paying off my student loan or start investing?

Not sure if I should get rid of my debt first OR start investing. Any advice?

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Discussion (7)

What are your thoughts?

Guo Hao Teo

Guo Hao Teo

07 Jun 2019

Level 7·Self-Taught Enthusiast at Personal Finance

I would think that paying of your student debt would be the top priority.

Because interest works both ways:

  • Up: When you have positive returns it will compound
  • Down: when you have debt, your interest of 1-2% will grow as well

View 1 replies

Since paying off your student loan is definitely reducing your liabilites, investing on the other hand does not guarantee a return higher than your interest costs on student loans - unless you can find a financial instrument which can guarantee a return of that higher than the interest costs (I believe is about 4.2 - 4.5%), which honestly such financial instrument is almost non-existent - and hence clearing student loan is a surefire way of improving your financial status!

All the best!

P.S: I am currently also agressively clearing my student loan... less than 50% more to go!

Loh Tat Tian

Loh Tat Tian

05 Apr 2019

Level 11·Founder at PolicyWoke (We Buy Insurance Policies)

Bouncing off the Two answers given, maybe I introduce a Concept shared by many (credits to them).


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