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Seedly PFF 2019

Asked by Anonymous

Updated on 18 Apr 2019

Should I clear my study loan first or accumulate wealth from my monthly salary? Currently my take home pay is around 2.6k and I have a 18k of study loan (left 14k now) with an 3% interest. ?

How much should I pay back to the study loan as I’m now repaying $150 per month and save 20% from my pay.


Answers (3)

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Dawn Fiona
Dawn Fiona,
Level 5. Genius
Answered on 03 Mar 2019

If your savings generate a return higher than the 3% interest that you need to pay on your study loan, then you should save.

But if your loans exceed the returns on your savings, then it is better to clear off your debt first.

You can read this post for more info:


Level 2. Rookie
Answered on 02 Mar 2019

Personally, I feel you should set aside at least 10% of your take home pay. So with regards to saving you’re on a good start since you save 20%. After that, you can concentrate the rest on paying off your loans, bills, and other miscellaneous spendings (like going out, transport, etc).

With what you save, let it accumulate over time and you can have a sum to invest, or you can easily do DCA(dollar cost averaging) that helps you invest monthly or periodically.

Hope this helps.


Henry Hoe Yong Zhi
Henry Hoe Yong Zhi, Co-founder at Cantley Lifecare Pte Ltd
Level 3. Wonderkid
Answered on 19 Mar 2019

Always remember that debt is not always bad. If you're taking debt to piss it off on parties and luxury, that is bad debt but if you are holding on to debt and using it to make more money, that is called leveraging.

Study loans are one of those loans that has very low interest rates. Lowest probably being property loans. Every other loans you are going to take later in your life has higher interest rates. Personal loan is about 6% annually and renovation loan about 4-5%. So if you are leverage such cheap loans, why would you want to pay it off fast?

What you want to consider is when you say wealth accumulation, how much are you making? If your ROI is much higher than 3% annually or $540 per year then of course you should not pay off that loan in advance.