I have a $5,500 subsidized loan that has been collecting interest for 2 years, should I make payments now if I have the money, or should I save and pay it off after I graduate?

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Posted by nathan boldyga (MONEY FORUMS: 4, Answers: 0)
Asked on May 6, 2016 10:27 pm
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Hi Nathan, great question.
Subsidized loans don’t accrue interest while you are in school; unsubsidized loans do.
Even students should have a cash reserve. A cash reserve is savings to use for emergencies or opportunities that periodically arise. It is a good idea to not spend your reserve to pay down debt, especially relatively low-interest debt.
If you do elect to pay down your loans pay the highest interest rate loans first. You will gain more by paying off the highest interest loans – they are costing you the most. You don’t gain by pre-paying a subsidized loan, leave these interest favored debts until last.

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Posted by Peter Neeves (MONEY FORUMS: 1, Answers: 59)
Answered: June 26, 2016 12:23 pm