5 Reasons to Pay Your Student Loans Immediately
Student loans seem to be a normal part of graduating from college. In fact, most people carry student loan debt throughout adulthood. But a case can be made for paying your student loans early. Below are five reasons why you should pay it off as quickly as possible.
1. The tax break is insignificant.
You can only deduct $2,500 off your taxable income. Compare this to the interest that you pay and the tax break amounts to nothing. It is far better to be rid of the student loans rather than hanging on to them for a tax break that is actually not even that great.
2. You lose a lot of money.
Think about how much money the student loan eats in interest. It probably takes up a huge chunk of your budget. Do you really want to be in this state for decades? If you pay off your student loans faster, you will be able to save up more quickly for other, better financial goals.
3. Your debt-to-income ratio improves.
Get rid of your student loan and you immediately lower your debt-to-income ratio. This means you have more money available to you when it is time to buy a house or to borrow money for a car. You can also invest more and focus on building wealth.
4. There is no escape.
Even if you file for bankruptcy, you still have to pay your student loans. Crazy, right? There is no escape. Well, except for death, which is not a promising thought!
5. You will be free from financial worry.
There is nothing like relieving financial stress. Your student loan debt represents a massive burden and getting it out of your life will feel incredible! Who says you have to live with it every day for decades when you can find ways to get rid of it as fast as possible?