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If you are one of the many Americans who are paying off student loan debt, you might be considering paying it off in full. There are many reasons why you should not pay off your student loan debt in full.

Don’t Pay Off Student Loan Debt in Full and Here is Why!

Student loan debt can be a huge burden, but it’s not the only form of debt you should worry about. If you are considering whether or not to pay off your student loan debt in full, there are several reasons why you should reconsider, especially in the current time frame.

The student loan interest is LOW!

Inflation is outpacing the fixed interest rate on student loans. Looking at the cost of housing, food, petrol, and flights, the current inflation rate is nearly as high as it has ever been, rather than the official figure of ~8%.

And your income remains constant, while everything increases in price owing to price creep.

Don’t pay the student loan debt in full!

So, unless you simply cannot use that capital elsewhere to generate more money, don’t pay off the debt in full.

Consider the following scenario: you have a $50,000 student debt. Is it preferable to pay it off in full (-50k) or put the money toward living expenses or other investments with a higher rate of return?

What you should do?

Obviously, it makes more sense to pay the $200 each month (or whatever the cost is) and keep your money, which you may utilize to significantly boost your earnings.

Because of inflation, the student loan becomes cheaper over time.

Find a means to enhance your income with the money you have on hand by investing in yourself and hard asset types (stocks, equities, coaching, real estate, etc.)

[Related Read: How to make saving for college easier than you think?]

Upgrade yourself with the low-interest money

Think about what else you could do with all of that money, and focus on making more.

Make your cash work for you. Invest in assets, shift money around fast, and invest in items that will increase your wealth in the long run.

These can be skills, assets, or anything else.

Even putting $50,000 in equities stocks or dividend securities and earning 8-10% per year (in a typical market) and then using the gains to pay the loan payment is a solid strategy to make money and get the debt paid off early in the loan’s lifecycle.

[Related Read: Don’t Panic, These 9 Ways to Make Money Online Are Getting HOT After Covid]

Get more out of your student loan

So, when you get your first paycheck after college or university, don’t pay off the exorbitant loan completely. Hack the matrix, finesse the game, and make informed financial decisions.

Spending your life saving to pay off a loan that has a negligible impact on your credit score does not appear to be a wise decision.

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