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For the financial gurus out there.....
A graduate has a student loan of $20,000. It is a government loan and thus is at the very low interest rate of 1.5% (linked to his country's rate of inflation).
A relative dies and leaves him $40,000. The best savings account that he can find is offering 1.65%.
Would it be better financially to repay the student loan or put all of his money in savings?
A relative dies and leaves him $40,000. The best savings account that he can find is offering 1.65%.
Would it be better financially to repay the student loan or put all of his money in savings?
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Comments
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What rate does he get on the savings after tax? Unlikely to me more than 1.5%.
However, I'm sure he could find an alternative investment that pays more than that.0 -
A graduate has a student loan of $20,000. It is a government loan and thus is at the very low interest rate of 1.5% (linked to his country's rate of inflation).
A relative dies and leaves him $40,000. The best savings account that he can find is offering 1.65%.
Would it be better financially to repay the student loan or put all of his money in savings?
We also need to know what country the graduate lives in so that we could Google for the rules for repayment of student loans in that country.Are you for real? - Glass Half Empty??
:coffee:0 -
Depends greatly on future plans.
If buying a house, I'd rather have the money as a deposit to reduce my LTV than have no student loan repayments to make. [Though if affordability of the mortgage was an issue paying down the student loan may help, depending on the rules of repayment.]0 -
Actually, the more I look at the OP, the more it looks like a homework question
Are you for real? - Glass Half Empty??
:coffee:0 -
Pah! Yes I think you're right FaNC.0
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