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Paying off student loans early doesn't always pay

Source Date: 
Tuesday, October 10, 2017
Categories: 

If you have some extra cash at the end of the month and are carrying burdensome student loan debt, you might be considering paying down those loans early.  But in some cases, it may be better to keep paying the loans according to your current payment schedule. Here are some examples of when it's smarter to put your money elsewhere.

High rate debt

Student loans tend to carry lower interest rates than other kinds of debt. So if you've taken on additional debt bearing a high interest rate, like a big credit card balance or an auto loan, financial experts say paying off that burden should be a priority.

"I believe you should look at all sources of debt you have first," financial adviser Rebecca Conner told CBS MoneyWatch. Does the student loan have the highest interest rate? If you currently have credit card debt you carry from month to month, it may be more expensive to pay credit card fees while paying off your student loan."

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