Pierini et al: finance suggestion

[Maxgain]

Pierini you seem to be involved in the financial advice so I have a quick question for you.
I have a $9000 (student) loan to pay off.
If I pay it this week I do not have to pay interest.

However I do not have the actual funds to pay it off. My old car started to pack in and as crucial for my job I bought a new one and had to get a decent one I could rely on.
So anyway my money to repay the student loan got transferred to minimise the car loan.

So here is the question.
I can take my wages from this month and income tax i have built up to pay government in Winter and pay off loan.
This would mean scrimping for next age and then no guarantee will not have to take out loan to pay towards tax though will be less than $9000.

The loan will be between 7-9% interest. I do have savings gong into an account each month at 7%. This has only started though

The biggest problem is I am taking a 2 month hiatus in summer and thus this will eat into money and income will not be coming in.

So what I am asking is it better to be debt free even if you have to struggle for a while or is it not better to pay it off as a loan at say $80-100 a week which will not hit overly hard just a curtail on budget here and there.

Thanks

[arbit]

Interest rate on student loan ?
How long will it take u to pay off student loan in a normal manner (ie, if not paid this week) ?

[Maxgain]

Originally Posted by arbit

Interest rate on student loan ?
How long will it take u to pay off student loan in a normal manner (ie, if not paid this week) ?

loan interest will be between 7-9%.
Term of repayment prob 2 years, could be 1-3

[Lady C]

Well considering your savings is at a lower rate than the interest for the student loan, I would focus on paying off the loan. You will be money ahead and bag the savings until you are done with the debt. It will take you between 2.5-3 years to pay it off (>$300 monthy payment). You should have saved for a car without financing it too.

I concur with Lady C.

Debt free is a goal but it doesn't have to happen immediately, particularly for a young buck like you. Direct your efforts in that direction. If you can borrow money relatively easy and there are no prepayment penalties from paying off your debt early, pay down as much of your current debt as you can reasonably handle, then borrow only as much as you reasonably need when you need it.

Take a one month vacation rather than a two month vacation.

Quit buying those expensive nutritional supplements and use the savings to pay off your debt.

Marry a rich old Irish woman and become her full-time boy toy.

[Maxgain]

Originally Posted by Lady C

Well considering your savings is at a lower rate than the interest for the student loan, I would focus on paying off the loan. You will be money ahead and bag the savings until you are done with the debt. It will take you between 2.5-3 years to pay it off (>$300 monthy payment). You should have saved for a car without financing it too.

If I bag savings to focus on loan I could prob pay it off in 3 or 4 months if I really scrimp and save. However if I go into loan payments the lowest Term I can get is one year.
However with the way the property market is going I am looking at helping to fund a house in October.
If I focus on paying of the loan this year my savings will be quite hit.

However does it make any sense to be saving while paying a loan just so you have that extra money to work with or should one clear all debts and then just start again with savings?

Oh yeah had no choice with car, old one packed in on the Wedbesday had new one on the Friday. No car no job. I dont believe in buying such a purchase cheap where Ill save money now and have to pay more later plus I have to be able to rely on it. So it was quite expensive

[Maxgain]

Originally Posted by pierini

I concur with Lady C.

Debt free is a goal but it doesn't have to happen immediately, particularly for a young buck like you. Direct your efforts in that direction. If you can borrow money relatively easy and there are no prepayment penalties from paying off your debt early, pay down as much of your current debt as you can reasonably handle, then borrow only as much as you reasonably need when you need it.

Take a one month vacation rather than a two month vacation.

Quit buying those expensive nutritional supplements and use the savings to pay off your debt.

Marry a rich old Irish woman and become her full-time boy toy.

So pay it off now and if I need that money then borrow it again?

'Do not have to be debt free immediately'. So would you recommend an easy repayment plan over 2 or 3 years which can be allowed for easily enough in my expenditure rather than stressing myself now to pay off as quick as possible so will not be paying back later?

Vacation is now only going to be 6 weeks. Its going to Australia so any less there is not much real point going to it.

My supplements I buy are not for bodybuilding but health and I consider them fairly important in the grand scheme. I only drink sparsely and compare this cost of what most people spend at weekends to supps use.

I cant be a toyboy to some old woman Im the one who's going to be the rich older man with the younger girlfriend later in life

[arbit]

What about taxes ?
Does your interest on savings get taxed ? If so, by how much ?
Do you get a tax break for paying student loans ? If so, by how much ?

With the present financial crisis and the ongoing credit crunch, will you be able to get a loan in the future at similar rates ? Is the savings rate fixed ?

[tim_mcf]

Originally Posted by Maxgain

I cant be a toyboy to some old woman Im the one who's going to be the rich older man with the younger girlfriend later in life

Seems to me they're not mutually exclusive. By the time you're old and need a younger girlfriend, the old woman will be dead and gone. Maybe she can help finance the young girlfriend.