Debt Repayment Plan

[AndrewGeorge]

Hi everyone, I'm hoping you can provide some advice. I'm 27, graduated university 2 years ago with $30,000 of student loan debt ($17,500 in federal student loans at 5.5% and $12,500 in provincial student loans at 3%) and $20,000 of car loan debt at 5.99%. Since then, I have paid off the car loan and the federal student loan. I paid off the remaining balance on the federal loan last month. Now that I only have the provincial student loan debt remaining at 3% interest, should I build up a solid emergency fund (mine is low per the DR method) and contribute $250 per month and my 2 extra paycheques per year for the next 2 years towards the loan and pay $372 in interest, or should I focus on paying down the loan now and not building up my savings and continue living an extremely frugal lifestyle? I've been facing major debt fatigue lately.

[Shwa Girl]

[Darth Penguin]

If you are asking this as your first post on a message board forum...you are trying to spam

there are far more reliable place to get this kind of informtion.....like your bank..other banks ...finacal advisors...

[Seedco]

You may get savings earning 1-5% interest but with the cost of living and inflation, it is much more worthwhile to pay off your $12,500 now, while you are in the habit of paying off debts and living frugal.

Chris - (theseedcoway.com)

[lorken]

I agree with Seedco. You have developed an extremely valuable skill: the ability to live on less than what you earn. Use that skill to pay of the remainder of your debt. Then, once you are debt-free, use that same skill to save for an emergency fund and retirement. If you do, you'll be in fantastic shape 20 years from now!

[hirev]

with the amount you paid off in the last few years I am guessing you make good money.

At the rate of payback it may be worth saving some money while paying extra on the loan.
Example
Canada student loan payment was 800.00 a month
Car loan was 800.00 a month
Current loan payment for pov. student loan is 200

This could allow you to put extra towards the loan to pay it off in 1 year.
To pay off 12500 in one year with 3 percent would be 1058 or so.
This would leave you with 742 remainder per month to save or 8904

If you would want to pay it off sooner without saving it would be paid off in 7 months paying about 1800 a month.

It might be more practical to try to pay it off in 1 year while saving some money. I would try to save 500 a month this would give you at least some money to go have fun with.

ALSO.

holy hell on the good job of paying stuff off so fast.

[jasperandchar]

Build your emergency fund first by the way you have done an awesome job on your debt repayment.

[bmaven]

I agree as well. Keep paying it off, but build your emergency fund. The last thing you want to do after all your hard work is get into trouble and revert to credit and thus more debt.