Personal Finance

Guy pays off $26500 student loan in less than 2 years

  • Last Updated:
  • Nov 24th, 2013 12:32 pm
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Deal Expert
Mar 25, 2005
21262 posts
2084 upvotes
glacier76 wrote:
Nov 21st, 2013 12:57 am
Given the tax deductibility of student loans, I don't see why some people are so so urgent to pay them off. I paid off my student loans back in May (9 years?) and it was great. But along the way, I bought a condo, a new car and travelled. I am much more aggressive with my mortgage (well, I still have that) and car loan (no more!).

Certainly, there are worse ways to use your money than pay down debt. But there are also better things to do with your money as well.
All depends on the cost of capital. Interest credit is only a 15% discount.
Jr. Member
Feb 17, 2013
170 posts
19 upvotes
ashleyBee wrote:
Nov 21st, 2013 12:25 am
didnt need to have library card... replace with imagination
Pay as you go $10 too high? replace with 50 cents payphone call/month.
$90 bus pass... replace with running to work

total cost: 50cents/month
Library card is free, so keep that.
Save 50cents, use public/free wifi and Google talk
Use donated bike (more efficient than running) to get to work

Total cost 0/month
Deal Fanatic
Dec 11, 2008
9147 posts
998 upvotes
I lived at home after graduation so I saved money there.

I had $21k in student debt upon graduation and $10k in the bank so I paid half of it off immediately.

I was also fortunate enough to have a full time job upon graduation from my co-op term so within 3 months after graduation I eliminated all debt.
Deal Fanatic
Mar 24, 2008
5607 posts
1708 upvotes
Toronto
glacier76 wrote:
Nov 21st, 2013 12:57 am
Given the tax deductibility of student loans, I don't see why some people are so so urgent to pay them off. I paid off my student loans back in May (9 years?) and it was great. But along the way, I bought a condo, a new car and travelled. I am much more aggressive with my mortgage (well, I still have that) and car loan (no more!).

Certainly, there are worse ways to use your money than pay down debt. But there are also better things to do with your money as well.
So let me get this straight, you think it is a good idea to take 9 years to pay off your student loan at Prime + 3.5% minus the tax credit? Assuming that prime stays at 3% over the 9 years, you'll be paying 6.5(interest rate) - 0.975(tax credit) = 5.25% per annum? Bravo.

You'll end up paying 1.5 times the original amount borrowed using your "strategy". To each their own, I guess. :D
Deal Fanatic
User avatar
Aug 10, 2011
9122 posts
1751 upvotes
Somewhere
I paid off my 34k OSAP in 2 years.. 50k job.. paying rent at market price to parents..
:confused:
Jr. Member
Dec 24, 2007
128 posts
10 upvotes
Toronto
Love success stories like this.

My husband and I paid off our $25,000+ debt in 10 months with a combined income of less than $60k. It's doable if you have the determination!

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