Pay off my student loans or save the money?

[Z ee Bee]

Should I pay $1000 a month on my student loans or should I put the money in a money market account and earn some interest? I'm in grad school and I work full time so I dont have to pay until 2009, but I want it all payed off before the government stops paying the interest. The trouble with having so much money in the bank is the temptation to spend it.There is no interest accruing while I am in school the interest and first bill is in Dec. '09. It will all be payed off before the first billl. I can start payments now while I'm in school and 100% goes to principal or I can put the payments in a Money Market at 4.5% (GMAC Bank).

[stuartzoo]

Put the money away. Keep working. Don't pay anything back.After about 5 years they will garnish your income tax return.You won't even feel it.

[dogo127]

Would putting say 500 on loans and 500 savings work?

[KitKat]

Paying it off will help your credit rating. You can do both though...pay some and save some.

[Tommy G]

If the interest on saving is higher than the interest on the loan, save the money and pay the minimum on the loan. If it is the other way around, pay the max you can on the loan and get it paid off before saving.

[stressed to the MAX]

I think that all depends on how much you owe on your loans, if it's low enough to allow you to be finished with them before you ever have to start paying them, then I think once you are finished with grad school, you will be much better off than other graduates.You are probably better off paying the student loans because the interest rate that you're paying on them is probably a lot higher than what you would be earning on your money in a money market account. The longer you pay down your loans, the longer you are charged the interest, so if you are able to make large payments and get your principal balance down some, then you will be paying less interest in the long run.either way, I think your idea NOT to just spend the money is great! keep up the good work!(also it would be smart to have some accessible savings for when emergency situations come up)

[Stacia Z]

Put the $1000 per month into the money market account. You'll earn interest on it, and won't be quite as easy for you to get to like in a checking account. Keep putting any extra money that you can save into the money market account.Then in Nov 2009 (before you've been charged any interest on the student loans) take the money out of the money market account and pay the full balance on the student loans.That way, your savings can earn you interest in the money market account, but you still pay off the loans before they charge you any interest.

[Nic]

I would suggest putting it in some sort of high interest savings. That way it will earn some interest over the next year and instead of having $1000 to pay off your loan you'll have $1000+ the interest. I'd also recommend committing a bit of each pay cheque to this account so that when it does come time you can pay off a large amount just before it starts accruing interest.It may not make a huge difference but every little bit helps. Just make sure you put it in something that's not TOO easy to get it back out of. Helps avoid temptation.

[XoxoxoxoX]

Since is 0% APR while you are on deferment until 2009. I would suggest you put your money in the money market account to earn interest. BEFORE the repayment kicks in, withdrawal the EXACT balance to pay off your student loan. I am sure by that time, you will have some interest earned on the money market account. If there is too much temptation, look for high interest rate CD account that you will be penalized when doing withdraws, but you can ADD money to it. Remember the CD term has be to mature before the student loan kick into repayment status.

[Mia]

Student community also needs money, mostly to meet the study expenses since everyone does not have enough money to meet all his expenses. Hence the low repayment student loans have come up to save them. Here, the lender will bear all the expenses of your study, including the hostel fees and food costs as well as the fees related to study, course material expenses etc. The repayment becomes low enough when you go for the secured options of low repayment student loans. Secured student loans require collateral attachment from your part and this makes the rates of interest real low which means low repayment student loans. Also, there are unsecured student loans where there is no collateral attachment and still there is low repayment in these loans.