Consolidated my 20k in federal loans into one loan at 4.5% interest. I’m young and have the funds to pay these off rather quickly (within the next 2 years). Is it worth going all in here or investing the funds/save for down payment. No other debt.

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I follow a guy named Dave Ramsey for all things financial. His philosophy is get out of debt as fast as you can and then start investing. Check him out. He has many books and a podcast.

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Thanks! I’ll check him out.

The purely mathematical answer stipulates making minimum payments on debt and maximizing index fund contribution to get ~10% ROI and only pay 4.5% in interest. Practical answer is that this sort of interest rate arbitrage is minimal for 20k, and also holds volatility and risk in the short run. The Dave Ramsey approach is OKAY in certain scenarios, but debt is a tool that can and should be used wisely to make you rich. In this case, I’d say for the peace of mind you want, and the minimum financial impact, get rid of this debt as it’s not “useful” debt (like levered investing into real estate). Happy to share more over a call if you wish

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Thank you for this analysis! Genuinely very helpful

Get out of debt, ditch those student loans because they will haunt you. You will have better luck and a better credit score if you’re not dragging student loan debt behind you. Besides give the housing market time to crash so prices come down before you start house hunting

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Saving will be easier when the debt is gone!

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I think you are on the right track. If you can pay it off quickly, that's perfect. Focus all your efforts on getting rid of the debt and then when it's paid, you can focus on saving/investing.

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Go all in. Keep a rainy day fund, but get rid of the student loans if you can.

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