Asked by Anonymous

I'm currently paying back my parents $100 monthly for the CPF education loan I took up last time. Should I try to clear this debt faster by repaying a higher sum (eg $200) or continue at a min of $100?

I'm not intending to ask my parent to waive away the repayment of loan for me hence I'm here to ask which is a better option. Thank you. Thank you guys in advance! Assuming that lump sum repayment is not an option sadly.

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    • Gabriel Lee
      Gabriel Lee
      366 Answers, 560 Upvotes
      Answered on 24 Oct 2018

      If the repayment amount incurs interest, then you should consider repaying a higher sum each month so as to clear off the debt as soon as possible to reduce the amount of interest payable.

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    • Lim Zhi Cong
      Lim Zhi Cong
      3 Answers, 4 Upvotes
      Answered on 24 Oct 2018

      Same boat here. Currently serving NS so won't need to repay. Initially wanted to one shot pay back to clear debt ASAP. But after some thought, I would choose to pay 100/200 per month, the rest will be used for investments. I'm confident of being able to get more than 2.5% returns in my I investments, hence I choose to repay slowly. This only applies if you are confident that you can beat the interest rates for your loan, if not best is to repay ASAP so that the interest doesn't snowball. There is no shoe that can fit everyone's feet. In the end the decision can only be made by you.

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    Huang Yixuan
    Huang Yixuan, Product Designer at Seedly
    19 Answers, 94 Upvotes
    02 Nov 2018

    Yeah try to clear it asap man. Debts are not good. Maybe you can try to cut down on your expenditure?

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