Asked by Anonymous
Asked on 24 Nov 2018
I am in Uni Year 1 and have $6k in my bank now but I owe CPF $4k for my Poly school fees. Should I pay now in one lump sum/monthly or just wait until I graduate? My parents are reluctant to help me pay CPF first as they are using cash for my Uni school fees. Is it better to save 6 months worth of emergency fund before I continue to invest in RSP every month as I am currently doing so?
Always pay off loans first!!! they come with interest and can snowball if you don't do anything about it. emergency funds are for those that are working already!
As with everyone in the comments below - Always pay of your student debt first!
Starting your career debt-free may perhaps be the most important starting point in your life.
Pay off your loan first so that you can reduce your interest payable. Bank interest is low and the amount pay back to CPF will be given the prevailing CPF interest rates.
To your next question, always make sure you have the min 6 months emergency funds before you start investing.
6 month's worth of funds is more applicable for those working. I think it's better to pay off your loan first to prevent paying more for interest over the next 6 months. Market isn't that good recently, and you wouldn't to make significant gains through RSP over the next 6 months (possibly lose your capital).