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Low Interest Loan Repayment or CD/HY Savings (lemmy.world)

submitted 9 months ago by Copernican@lemmy.world to c/personalfinance@lemmy.ml

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Looking to pay off $15k of student loan debt of my partner. It's something we could wipe out with cash on hand if we wanted to relatively quickly. But one of the loans is 4.5%. Am I better off just riding that out but keeping the cash in for that loan in a HY savings account or keep reinvesting it in short term CD's that have a 5% return and to have more liquidity?

There's a part of me that used to really enjoy the piece of mind of being debt free when I paid off my student loans. But now that I'm more financially established and disciplined, I'm wondering if it's better to pay it off slowly.

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[–] ISometimesAdmin@the.coolest.zone 2 points 9 months ago

It's a pure math equation. You know you'll have more money at the end of the day if you keep as much as you can in a HYSA.

So do the math on exactly how much more.

Is that amount worth your peace of mind over that long a time period? Is your partner someone you want to spend that much money on right now?

These are simple questions to ask: maybe harder to answer. But once you have them, just make a choice and be happy with it.