Optimal Finance Daily - Financial Independence and Money Advice 3271: [Part 1] How to Pay Off Student Loans Fast On Your Path to FIRE by Scott Rieckens of Playing With Fire
Sep 4, 2025
Explore the hidden costs of student loans and their impact on your journey to financial independence. Learn about various repayment options and alternatives like grants and employer assistance. Discover strategies to tackle debt while balancing education with work experience. Get personal insights on managing financial stress and maximizing the ROI of your education. Remember, student loan debt doesn’t have to derail your financial dreams!
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Three Factors That Define Loan Cost
- Student loans consist of three key parts: principal, interest rate, and repayment term.
- These three factors together determine how much your education actually costs over time.
Longer Terms Inflate Total Cost
- Lengthening your repayment term lowers monthly payments but massively increases total interest paid.
- A $10,000 loan at 6% rises from $13,322 over 10 years to $21,585 over 30 years due to extra interest.
Opportunity Cost Of Slow Repayment
- Extended repayment not only costs more interest but also creates lost investment opportunity.
- Investing the extra annual interest instead could have yielded an additional $18,299 over 30 years at 5%.