I don't really need the extra cash, but I'm already approved for the money for FIn Aid.
2006-10-18 03:42:26 · 7 answers · asked by Anonymous in Business & Finance ➔ Investing
Depends on the % rate , it is a LOAN which means you have to give it back eventually + interest. You do the math.
2006-10-18 03:47:32 · answer #1 · answered by kate 7 · 0⤊ 0⤋
If you want to invest, you might want to make sure that the interest you would accrue on your loan is not more than what you will make on your investment, because with an unsub, you do accrue interest. If your interest is capitalised, meaning that you put it all off until you begin to repay the loan, it will increase the amount you have to repay even more. If you choose to pay the interest as it accumulates, you'll repay less in the long run.
I have a friend who turned all his loans for grad school down because he did not need them and he would rather the funds be there for individuals that needed the financial help for their educations. It's up to you. The unsub is not need-based, so if it doesn't' bother you to take it, and you think you can make a profit, I guess you can do so.
2006-10-18 10:49:49 · answer #2 · answered by Angela 2 · 0⤊ 0⤋
The interest rate for student loans is 7% according to what I'm paying now. You get a tax credit for the interest you pay so that's 140 in interest and you save let's say 10% of your income from being taxed. That's a savings of 14. This is assuming you're working.
So your out of pocket cost for this loan is 126 dollars annually (6.3%)
To break even on an investment with this money, you're going to have to make more than 6.3% because you'll be taxed on it. Once again assuming your average tax rate is 10%, you'll need to make close to 7% on your investment to break even. (6.3%*1.10)= 6.93%.
Without taking into account brokerage fees, you'll need to find a relatively safe investment that can guarantee at least a 7% rate of return. That's not impossible, but you don't have much wiggle room with the amount of money you're dealing with. You'd need to sink all 2k into one stock, EFT, whatever and then roll with that risk. I don't believe in mutual funds but in this case, their outrageous fees are taken before profits are issued so if you choose carefully you might make a little money.
My overall recommendation is to not take it.
HOWEVER, what I did when I was in college, was to take the student loan and pay off my outrageous college student credit card at 20% interest. That saved me money in the long run.
2006-10-18 11:20:25 · answer #3 · answered by GoddessofCoughSyrup 4 · 2⤊ 0⤋
don't take it! I am trying to figure out how to pay all my student loans back with a low paying job and a degree that is not helping me find any other employment.
2006-10-18 10:44:29 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Those loans are supposed to be for students who need financial help to get their education. If you don't need it, I don't see how you could even qualify. Taking it would be wrong. You should leave it available for another student who really does need it.
2006-10-18 10:45:17 · answer #5 · answered by LSF 3 · 0⤊ 0⤋
dont take it if you dont need it. Im sure your student loans will already add up to alot so no need to add to that total. Take care
2006-10-18 10:51:28 · answer #6 · answered by Michelle : 5 · 0⤊ 0⤋
take and invest
2006-10-18 10:49:55 · answer #7 · answered by Anonymous · 0⤊ 1⤋