Student Loans vs Investing

[Zachary S.]

Hi everyone,

I am in the last leg of grad school and just recently took it on myself to start learning about real estate investing. Since then I have started reading a few REI books that everyone seems to recommend and try and listen to the BP podcast anytime I jump in my car which is great by the way. With college almost at an end, I will have a little bit more time on my hands to really jump in and learn the various aspects of REI but want to know what everyones thoughts are. My long-term goal currently is to buy and hold but like I said I am still just getting my feet wet and trying to absorb as much as possible.

A problem I keep running across when thinking of how i will begin investing is that when I finish grad school in the next few months, I will need to start paying back some of my student loan debt i've accumulated. Has anyone had any experience or been through this? Is it smarter to try and pay back the loans as soon as possible or should I try and just pay the minimum and use the excess income to invest.

Any thoughts would be awesome especially if anyone has been or is currently going through this right now.

[Account Closed]

One thing to consider is the rate of your student loan. If it's low (i.e. 3.5%), then you might be able to make better a better return investing. If it's high (i.e. 12%), then you will be better off paying off the loan. You save yourself 12% on every dollar. If your RE investing makes you 10%, still better off paying off the 12% debt.

Depending on the dollar amount of you loan, it could potentially impede your taking out loans with favorable terms. Lenders will look at your debt-to-income.