Student-loan borrowers owe nearly $25,000 on average. Paying back the minimum means it can take years to make a significant dent. But is it smart to pay off student loans more aggressively?
It depends on whether you have other types of debt. Student loans tend to have low interest rates, usually below 9 percent. It’s best to pay off higher interest-rate debt first, such as car loans and credit card debt, says Alexa von Tobel, founder and chief executive of financial management site .
You need to also think about your future before throwing extra money at student loans. Fund your retirement accounts because you can earn a higher rate of return in the stock market. Also, make sure you have an emergency fund to cover about six to eight months of expenses. If you decide to pay more on your student loans, pay off any private loans first. Many private loans have variable rates, meaning that their interest rates could jump in the next several years, says Zac Bissonnette, author of “How to Be Richer, Smarter and Better Looking than Your Parents.” The Associated Press
