What should I do? Pay off CPF loan first or continue to save and invest? - Seedly

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Asked by Anonymous

Asked on 24 Nov 2018

What should I do? Pay off CPF loan first or continue to save and invest?

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?

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Yong Kah Hwee
Yong Kah Hwee
Level 6. Master
Answered on 25 Nov 2018

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!

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Casey Choo
Casey Choo
Level 3. Wonderkid
Answered on 26 Nov 2018

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.

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Ck Chai
Ck Chai
Level 4. Prodigy
Answered on 25 Nov 2018

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.

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Lok Yang Teng
Lok Yang Teng
Level 6. Master
Updated on 24 Nov 2018

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).

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