Low interest student loans

[Decapolis]

Not really looking for advice, more just curious about others plans. For those of you that consolidated around 2005 what are you doing about your student loans? Letting them ride for 30 years? Paying them off quickly? My interest rate is 1.6% and I just can't convince myself to pay anything less than the minimum. I though maybe once I hit a magic number in retirement accounts I'd say enough is enough but I'm not sure.

[MaxPower]

I graduated after you did (in 2008) so my lowest fixed interest rate is 2.875%. I also have some at 4.25%. My last two years were at 6.8% and those have already been refinanced with DRB and paid off (as of last month). I am now taking the extra that I was paying on the refinanced loans and plowing it into the 4.25% loans. I have been paying minimum on the 2.875% loans since I entered repayment, however.

I know that a few on this board, Zaphod and DMFA if I recall, are only paying minimums on low interest rate loans and then investing the difference. As long as you have the discipline to truly invest and save the rest rather than expand your lifestyle then mathematically that makes the most sense.

Once my 4.25% loans are paid off in another month or two I'll have a decision to make. I don't really want student loan payments, no matter how low they are, for another 22 years so I'll probably do a 50/50 split for loan payoff and taxable investing until they're gone. May not make the most sense mathematically, but will be nice to have them gone.

[Decapolis]

I agree...anytime I think about paying them off early I go back and read zaphods post! I feel the same way though, I just hate having the debt. We are saving 30% towards retirement so I could probably ratchet that back a bit and have them knocked out in less than 2 years but I just feel stupid doing that when I run compound interest calculators but the thought of still having student loans in my 50s sounds terrible.

[The White Coat Investor]

My mortgage was similar and I deliberately carried it for a couple of years when I didn't have to. Then I got sick of being in debt paid it off. The main reason was I was spending the difference, not investing it.

[Dicast]

No rush on the repayment at 1.6%.  If you can't beat that with long term investing then I don't know what you are doing.  I think it gets down to just not wanting it there.  My only argument would be that in the unlikely event someone sued you for "everything" is that paid off loans can be a little "asset protection".  I've had similar thoughts on our mortgage at 2.8%.

[Decapolis]

The White Coat Investor wrote:

My mortgage was similar and I deliberately carried it for a couple of years when I didn’t have to. Then I got sick of being in debt paid it off. The main reason was I was spending the difference, not investing it.

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Good point. Even though it's low interest I feel like I can't buy any sort of expensive toy or spend significant money on a "want" bc clearly paying down a loan(even a low interest one) is better financially then doing a home renovation that isn't necessary or putting in a home theater.