The CARES act puts the interest rate for federal student loans at 0% until December 30th and there are no mandatory payments for student loans until that time.
I owe $32,000 in federal loans, normally at an interest rate of ~4.6%.
I owe $60,000 in private loans, at interest rates ranging from >6% to <11%.
If I'm trying to best take advantage of the CARES Act and reduce the total amount I'll be paying (I plan on continuing to pay more than the minimum even after Covid-19), should I:
- Pay the minimum for the private loans and pay as much as possible of the federal loans, so that when the interest starts accruing again next January, it will be accruing on less. Also, when the interest starts accruing I would go back to paying the minimum for federal loans and making extra payments to the higher interest private loans.
- Don't pay the federal loans while CARES Act is in effect and pay as much as possible to the private loans, paying everything more than the minimum to the private loans with the highest interest. This way I pay off the loans with the highest interest fastest and they have the least amount of time for the interest to accrue.
- Another option I didn't think of. I'm open to options haha.