Low Interest Rate Students Loans-- Pay off early or not?

[ekatiel]

So, I know what Dave Ramsey says about this, but I wanted to get some other opinions. DH and I both have student loans with interest rates at just above 2%. The payments are easy for us to make. Would you try and pay them off early, or just let inflation work in your favor and pay them off on time (that's about 10-12 years from now)? --Katie

 

[kkwis2]

I hate to owe money, so I would pay it off.

 

[prncess674]

I am not a fan of Dave Ramsey, but unless you have some amazing investment vehicle that is paying amazing dividends AND you qualify for the student loan deduction then pay them off. Before paying off be sure that you have fully funded your 401k and Roth.

 

[lilpig]

pay it off, no debt is better than low interest debt

 

[ah1126]

With my student loans, I have always tried to pay a little more every month. Some months it is less than $5, others I can do more. I figure every little bit helps and I hate the thought of paying on the loan for so long!

 

[puffkin]

If you have any other debt such as a mortgage, I would put the extra money towards that first. I would not pay off the student loan debt at that low of a rate unless you have absolutely no other debt. I would also look into other investment options even in a down economy it isn't that hard to get at least a 2% return. If you have kids, it may also make more sense to contribute extra money to a 529 type of plan instead.

 

[jmac323]

So currently I am paying off higher interest debts first. When it comes down to just having my student loan, I will pay what I can. If I can pay more than the minimum I will and be done with the debt rather than just letting it sit around. Even though 2% is small, it is extra to pay. So if you have higher interest debts paid, safety net funded, then I would pay more on student loan and possibly put more into IRA or something.

 

[aymekae]

I think the biggest question is, what will you be doing with the increased cash flow from not having those monthly payments? That answer should drive your strategy.