Personal Finance

Low interest on Student Loan

  • Last Updated:
  • Oct 8th, 2018 5:36 pm
Feb 25, 2014
16 posts
1 upvote

Low interest on Student Loan

Hi ,

I have a 14k student loan with the government and the interest rate is 4,20%. With the provincial (QC) tax credit , the interest becomes roughly 3,5% a year.

Is it even worth paying anytime more than the minimim ? I currently pay ~50$ bi-weekly for the next 15 years . I have no other debt.
3 replies
Deal Fanatic
User avatar
Mar 23, 2008
9830 posts
Put it this way... if you have money you need to decide what to do with (i.e. surplus to your living expenses), what else will you do with it? Low interest isn’t the same an no interest, so you’re still losing money on it. The only way it makes sense is if you invest in a product with a rate of return greater than your interest rate.

If you’re blowing your money on video games and booze, then it’s a no brainer to pay down your loan first. Or if you plan on buying a house soon, as it will affect your debt ratios.

Jan 10, 2018
341 posts
meh Student loan debt isn't that bad..... I'm not sure how it works in Quebec if you have the option of a floating or fixed rate. If you have a floating rate then I would recommend paying extra if you can afford it, because interest rates are only going up and the next hike is in a couple weeks!

I guess I should add if you're carrying any other debt like a Credit Card or loan pay those off first before putting extra on your Student Loan. If all you have is your Student Loan then by all means try to pay it off quicker, but keep some cash in savings for emergency's.
Deal Addict
Apr 5, 2016
3661 posts
If it's with NSLC, you can even apply for Repayment Assistance and they may even cover some or all of your interest depending on your income. You can still make extra payments so you're still paying down.
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