Large one time Student Loan Payment vs Savings (pay, rate, accounts)

[FedExpress50]

Looking for some advice here as my first student loan payment will be due in late November. The loans total 34k and there are 5-6 different ones with differing amounts. I don't want to empty my whole savings account to pay off the whole loan but I am comfortable paying off 17k right off the bat as that would put my monthly payment going forward at $200 per month. That will be very reasonable and I will make larger payments some months. I have no other debt at this time. I have been looking at condos and would like to have at least 12k for a down payment(fairly low cost of living area). Would it be better idea to pay more than 17k at this time? Obviously that would be ideal but I feel much better having something in my savings account. Also, is there an advantage to paying the loans during the grace period over making that payment the first month or two? What would be the best to combine all the loans so that I only have one bill to pay each month instead of multiple? Thanks in advance.

[golfgal]

What is the interest rate on those loans? It might not make strict financial sense to pay they off early at all if they are low interest loans. Now, it's nice not having the debt but I wouldn't put any extra money toward them unless you have at LEAST 6 months of expenses saved, more like 12-18 and are fully contributing to your retirement accounts.

[FedExpress50]

The interest rate averages out to about 5%. I will pay the higher interest loans off initially so the remaining loans should all be 3 or 4 percent. By paying off half right now, the monthly payment going forward will go from just a bit over $400 to $200. This just makes sense right now and will make things financially easier in the future. I will still be able to save a good amount each month for 5-6 months after paying off half the loan so that will give me a chance to increase my savings.

[Athair]

Originally Posted by FedExpress50

The interest rate averages out to about 5%. I will pay the higher interest loans off initially so the remaining loans should all be 3 or 4 percent. By paying off half right now, the monthly payment going forward will go from just a bit over $400 to $200. This just makes sense right now and will make things financially easier in the future. I will still be able to save a good amount each month for 5-6 months after paying off half the loan so that will give me a chance to increase my savings.

That $17k initial payment is essentially 42 monthly payments @ $400.

42 months is a nice buffer to have if SHTF.

The interest saved in paying it off instantly (about $2500??) is quite low in the 'grand scheme of things' (i.e. only 6 monthly payments).

I'm all for paying off debt ASAP and if you don't 'need' the cash on hand, go for it, but otherwise... hmmm