I'm currently paying off a little over $13,500 of student loans, at a rate of $300 a month and accrues approximately $60 of interest each month. My bi-weekly take-home salary is approximately $1,350 (after health benefits, taxes, Social Security and union fees) and I live together with my wife, who makes a very modest SSI income and contributes part of it to our rent ($200 each month, for $950/mo. rent).

I'm looking towards the future, and considering down payments on a car, or possibly even further down the road a house. But I am also very interested in completely paying off my student loan to get rid of my horrible debt.

If my math is right (and I admit my math may be shoddy) then it'll take at least 3 years to finish paying off this loan. Should I start paying less into the loan in order to save up for a down payment now? Or should I wait until more of my loan is completely paid off?

1 Answer 1


The direction you take is up to you and many people can give you advice, but there is no right answer.

Some people will recommend saving up enough money for a rainy day fund. Enough to support yourself and your family should you lose your job, until you can get a new job.

Paying off your student loan will guarantee you a return on that money based on whatever your student loan interest rate (roughly 5% it looks like), but you lose out on leverage for that money that you may have for other investment opportunity or buying a house, etc.

I'd say try to do a little bit of everything. Others would say to do it in steps. Either way, it is all going to take time.

  • One thing to consider (this happened to a friend who took a government job) is that if there is any chance of any part of your student loan being forgiven, perhaps paid for by an employer or through any other program, it would suck to not be able to take advantage of the free money because you had paid it off early. This may not be relevant to you, but like I said, I've seen it happen.
    – Rocky
    Commented Oct 10, 2014 at 22:24

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