Smart tips for paying off student debt?
Lost asked:
I’m out in the working world now, and eager to get the monkey off my back that is $50,000 in student debt. I’ve heard lots about not paying off too early due to penalties, investing, loan relief and the like, but I have no idea how to go about it. I have a Canadian degree with an Ontario-Canada integrated student loan (OSAP) as well as a line of credit.
I’m out in the working world now, and eager to get the monkey off my back that is $50,000 in student debt. I’ve heard lots about not paying off too early due to penalties, investing, loan relief and the like, but I have no idea how to go about it. I have a Canadian degree with an Ontario-Canada integrated student loan (OSAP) as well as a line of credit.
Any advice is GREATLY appreciated.
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Tags: Ontario Canada, Student Debt, Student Loan
February 12th, 2009 at 12:34 pm
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Take your time. There’s no rush.
February 13th, 2009 at 11:47 am
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research this before you goto college
February 16th, 2009 at 6:47 pm
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Assuming you have more than one loan, I’d focus on the ones with the highest interest rates and try to pay those off more quickly if possible. Even better, if you have credit card debt as part of this get that paid off first - their interest rates are almost always higher than student loan interest rates.
A quick search online turned up this page about the OSAP and its loan forgiveness program, which seems to have turned into a grant program. If your loans are more recent than 1998, you’d be in the grant program. It sounds like something you’d get automatically.
February 19th, 2009 at 12:55 pm
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You need to know the interest rate for each loan, any tax breaks that may apply for the interest, and the penalties associated with each loan if you pay them off. No one here can give you much help without at least those three things.
For instance, if you have a 10% loan with no tax breaks and no penalties for early payment, then you almost certainly want to pay that off as quick as you can (unless your line of credit has an even higher interest rate).
But if it’s a 5% loan, with the interest deductible on you income taxes, and a 10% penalty for paying it off early, then there’s absolutely no reason to pay any more than the minimum.
Chances are, though, that your specific situation is something in between these two extremes . . .
Good luck,
Doug