Selling stocks to help pay off loan

[mysticaltyger]

Originally Posted by Suburban_Guy

I'm curious to see if anyone else has been in my situation.

I have some regular stocks (not options) sitting in my trading account. These stocks were from a company I left years ago, but still held onto them.

I also have a huge student loan that I am dealing with.

Now, if I sell these stocks, I'll have enough to pay off half of the student loans, which will put me in a more manageable financial situation since my monthly loan payments will be cut in half. It will also put me closer to paying off the loans.

Do you think it is worth it to do this? The stock has been relatively stable the past three years price wise.

Yes, I would sell the stock and pay off the loans. Individual stocks can go to zero. Student loan debt is not dischargeable in bankruptcy. It's too risky to keep those stocks when you have student loans. The only exception would be if you think you can pay off those student loans very quickly, like in a year or two at the most...but that doesn't sound like that's the case, based on your post.

[leastprime]

JMO, Sell and extinguish the 6.1% loans.
We have PLUS on son and he has Stafford loans, both at 3%, 2006 vintage. We are Not going to accelerate payments but let them amortized out. The interest rate risk burden now belongs to the holder of the loans.

[CaptainNJ]

Originally Posted by Suburban_Guy

Thanks all for the inputs.

My interest rate for the school loan is 6.1 %

My stock hasn't gone up but has stayed more or less the same the past two years. I think it's a stable company but doubt it will grow much more.

I am leaning towards selling now, at least some so I can refinance to get the monthly payment down.

id advise to sell the stock and pay off the loan.

selling the stock may come with a tax obligation but its better than owning an under-performing stock.

[sheerbliss]

Originally Posted by Suburban_Guy

I'm curious to see if anyone else has been in my situation.

I have some regular stocks (not options) sitting in my trading account. These stocks were from a company I left years ago, but still held onto them.

I also have a huge student loan that I am dealing with.

Now, if I sell these stocks, I'll have enough to pay off half of the student loans, which will put me in a more manageable financial situation since my monthly loan payments will be cut in half. It will also put me closer to paying off the loans.

Do you think it is worth it to do this? The stock has been relatively stable the past three years price wise.

The first thing to do is see how the stocks are doing, regardless of your financial situation. If it's a large company, Morningstar probably has an analyst report on them. You can access Morningstar through your public library's research databases with your library card, or just go to the library. If there's no analyst report, you can look at PE ratio compared to its industry. If it's high, sell; if it isn't, but the company is fiscally healthy, you might hang onto it. If none of this makes any sense, sell and look into Vanguard index mutual funds.

I take it you're having a hard time making ends meet. The risk in that situation is that in an emergency, you'll probably have to rely on credit cards with a high interest rate. You could sell the stocks when and if you have an emergency, but you don't know what they'll sell for at that time. A possible alternative to selling assets is to reduce your expenses or increase your income.