Should You Pay Off Your Law School Student Loans or Invest?
From Frugal Law Student:
One should ask two questions before deciding to pay off their student loans or to invest.
1. What is the the rate of after-tax interest you are paying on your debt?
2. What is the the after-tax rate of return you expect to earn on your investments?If your return rate for investments is higher than your interest rate on your student loans, you’ll be better off lengthening your payment on student loans and investing. Think about it.
Let’s say you decide to not invest and pay off your student loans. Depending on your salary, it might take you years to pay it off. During those years of paying off loans, you missed out on high investment returns where some of that money could have been working for you.
Additionally, the interest on student loans can be written off on taxes. So, in some weird way [you might] actually save money by having loans.
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