It will be close to 3 years since I graduated from University. The cost of my degree was 4 times $6,000 = $24,000. Of which, 75 percent was paid from my Dad's CPF monies. After leaving the University for one year, I opted to pay $288 per month, to repay the monies owed to my Dad's account, including interest that would have been accrued.
I was doing a check on my bank account balances today to see how much liquid cash I have, partly to pay off the credit card bills on my recent trip. Then the thought hit me - should I pay it off all in a lump sum? I recall reading from another post from Uncle8888, regarding whether should one payoff their mortgage earlier as well as the other permutations.
Anyway, personally, I believe that I should drag the installment on my loan repayment to my Dad for as long as possible. This is because this enables a legal bond between my father and me. Furthermore, if I were to repay the loan at one go, there may be no idea where else the monies will be headed. Correct me if I am wrong.
Hi,
ReplyDeleteBy mathematical calculations you should know which loan to pay off first. But psychologically what makes you sleep soundly at night is very important too. The best solution is where mathematically and psychologically can be in "synch". Hope you find it.
Hi Temp,
ReplyDeleteI agree that I should payoff the money as soon as possible. However, I am also aware that once I pay up that loan, I am not legally bonded to my father in terms of the loan (parents maintenance act is another one).
I am making this decision also because I am in the phase of life where I have to save up for marriage and/or further education. I can only blame myself for getting in the financial planning game a bit late.
Personally, I know that I can cough up a bit more cash to speed the repayment process. But I have the niggling feeling that if I were to pay my loan fast, I will have other non-legal financial obligation, if you catch my drift.
Loan repayment education must ultimately be repaid and interest is centered when you get your education and you will pay back much more than you need or borrowed. So be sure you know how to calculate or know the total cost of borrowing before signing the application or the contract. Think and honestly assess the repayment schedule and try to determine whether you will be able to meet the timing and amount after graduation.
ReplyDeleteSpara pengar