/biz/ - Business & Finance

So in response to an anon lamenting his student debt loan woes 13 hours ago.You can go to numerous banks and lending organizations that will purchase the right to your loan contract outright and then charge you a rate, which can be as low as 3% for the duration of payment. They can afford to do this because they have millions to billions of dollars and they charge you the minimum amount they need to make money more or less. The rates available change over time depending on market conditions, so in cases where the rates are close to what you are normally charged, chances are they will go down significantly at some point. This is why its in your best interest to pay back debt as slowly as possible over the longest period of time. You can eventually negotiate a lower rate for a larger amount of your principle if you slow burn it. This same logic applies to most things in fact, imagine
Anon A pays an additional 10,000 dollars per year towards student loans, or save that money towards safe investments
Anon B decides to save 10,000 per year but he has to pay student loans for an additional 10 years.

In ten years, would you rather, have 100,000 dollars and 100,000 dollars of debt
OR
Have 0 dollars and 0 debt.

This is assuming a rate of return of 0.00%. Having money is having security. Paying loans over time helps build credit, and it saves your own capital for investment, and more importantly, to keep you safe in the case of unforeseen life events. If you have 0 dollars and 0 debt, you can't handle ANYTHING happening. Car breaks down? Fucked. Lose your job for 2 months? Fucked.

So many people fail to save because they feel compelled to pay everything off as soon as physically possible. You fuck yourself by limiting your cash flow, and open yourself up for destruction by random life events you are not prepared for. Even if after ten years you don't want to debt, you have the money to pay it off, and all the while you didn't leave yourself vulnerable.