Asked by Anonymous
Asked on 25 Jun 2019
I have recently graduated from uni and would be starting work soon in July. Just wondering if there’s a best yet feasible way to reduce interests incurred... how would you make the repayment? Or if anyone had a similar experience and can help provide some advice?
I think most would have went thru this route. I don't know if there is minimum payment on the both, or if its treated as one combined loan. If they are both from cpf, then the interest would be pretty much locked @ 2.5% which ain't too bad (excluding mortgages, lines of credit / credit cards / consolidated loans charge 4+ to over 26% interest).
This is a good ground for you to learn how to manage debt. I would suggest you do a budget for your expected first pay (less 20% cpf). Maybe set aside 15 - 20% of your pay and arrange for the giro deduction. If after all expenses and giving family some money, you still have balance savings, you can adjust the monthly repayment gradually.
I think I paid off mine in 3+ years. Once you settle the loan, and have gathered discipline to manage your budgets, you can channel the money once used to pay off these loans towards investing via rsp.
Dont stress out over 2.5% interest. Credit card interest is the one to fear the most. I have seen quite a few people buried by credit card debt and become bankrupt.