About a year and a half ago my wife and I decided that we wanted to get into real estate investing. In particular buy/hold single family homes in the Kansas City area. However between the two of us we had $70,237 in student loan debt as of 8/15. (I've been keeping track of our net worth since then bc of Gary Keller's recommendation from the Millionaire Real estate Investor). My dilemma is what to do with our student loan debt. We have paid down the majority of our 6.8% rate loans and now have the option to consolidate the remainder at great rates. We now have a total of $41,000 of student loan debt as of 9/16. Here are our numbers.
Wife
Her current payment is $350 a month because Navient updated her payment plan. The 2.4% loans are variable rates and have a term of 5yrs they refuse to change the term on these loans. Thus, I looked into consolidating bc it was the only option to not pay off the low interest rates on 5yr terms.
She will have the option to consolidate at the following amt/rate.
$17,606 at 4.75% for 20 years the payment will be $113 a month. (We get a %0.25 rate decrease when we pay with an auto debit payment. Thus, it will actually be 4.5%)
She will still have about $6,000 at 6.8% to pay off.
Me
I have the option to consolidate at the following amt/rate.
$17,398 at 4.75% for 15 years the payment will be $135 a month. (We get a %0.25 rate decrease when we pay with an auto debit payment. Thus, it will actually be 4.5%)
My question is what is your opinion about what we should do. I think that we should consolidate with the scenario mentioned above and once my wife’s 6.8% loans are paid off start paying the minimum due and save for real estate or other investing opportunities. What are your thoughts. Are we doing the right thing by consolidating? I know that student loans have awesome tax benefits.
