Article weighs paying off student loans versus investment

June 16, 2015
Article weighs paying off student loans versus investment

(HealthDay)—Newly-minted physicians should consider the issues relating to paying off their loans versus investing for retirement, according to an article published in Medical Economics.

The article discusses whether newly-minted physicians should start by paying off loans or invest for retirement. Two issues should be considered with respect to this question: attitude toward and the interest rate on student loans.

Peace of mind is key, and if having debt is stressful then the loans should be paid off in full first. Refinancing is recommended if the interest rate on loans is more than 4 percent. If the interest rate is still high after refinancing, the loans should be repaid, rather than using the money to invest. If the is low and being in debt does not cause unnecessary stress, extra money should be invested in a retirement account, giving priority toward maxing out the allowable salary deferral to employer-sponsored , especially when employers match contributions. Those working in the public sector may be eligible for loan forgiveness. Taking on additional debt, including home purchase, should be considered carefully and possibly delayed until are paid.

"Consider hiring a financial advisor who is a fiduciary and is legally obligated to act in your best interests," the article suggests. "These are complicated issues you face as young doctors, and having an expert in your corner will set you up for future financial success."

Explore further: New programs aim to forgive student medical loans

More information: Full Text

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ruslia82
not rated yet Jun 16, 2015
Student loans have already brought many young borrowers into the situations when they can't cope with the debt and have to take another credit to cover the initial one. Fortunately, there're programs and plans to help, still, many keep on borrowing from parents' savings. work extra hours and sometimes even go for short-term loans to cover expenses (more on onlinepaydaycalifornia.com). Thy system keeps proving itself ineffective.

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