It’s become almost impossible nowadays to graduate college without incurring student loans. Today’s graduates rack up loans of up to $20,000 by the time they have their first job. This has put many young professionals in a dilemma: should they start paying off their loans as soon as they can, or should they be saving money for a mortgage?
For most people, the best option is to pay off their debts slowly but regularly. One should first start off with the highest interest loans first, such as payday loans and then credit card debts, followed by mortgages and student loans. Consolidating your higher interest debts may help with this. If a student opts for the floating rate option, then chances are that the current interest rate will be lower, making it easier to pay off the debt sooner rather than later. Any interest payments will also go towards pushing down personal income tax rates, as long as the ownership is structured properly.
There’s no simple way to get rid of one’s student debts because most people have a mix of local and federal loans, as well as co- options with their guardians and other collegiate tie- ups. A student loan today is a complicated mix of rates and payables that can confound the average person. A good rule of thumb however is to start paying it down as soon as possible. If the situation allows it, a person can start shaving away his liabilities even before he’s graduated. The small dent may not look like much, but in a few years time, it can be provide a strong foundation for less interest payments.
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