I have some Federal Govt student loans left over with a "low" interest rate of 2.65%. A while back, instead of paying the loans off, I dumped an equivalent sum of money into a savings account linked to the loans via auto-payment, and up until lately the money in the savings account was earning a higher interest rate than the 2.65% on the loans, so it didn't make sense to pay off the loans -- I came out better just by having the money in savings/CDs. But in my mind, the loans were "paid off."
Now that the interest rate on the savings account/CDs is so low, I'm getting ready to pull the trigger on just paying off the loans for real. (Of course, when I do, I'm almost bound to kick off the inflation that everyone is talking about, thereby foolishly letting go of my nice "low-rate" student loans.)
What would you do in my shoes? I realize that this is a nice "problem" to have, and that this is more of an emotional issue than a financial one, i.e. letting go of my "dream" of never paying off these "low-rate" student loans early.
Now that the interest rate on the savings account/CDs is so low, I'm getting ready to pull the trigger on just paying off the loans for real. (Of course, when I do, I'm almost bound to kick off the inflation that everyone is talking about, thereby foolishly letting go of my nice "low-rate" student loans.)
What would you do in my shoes? I realize that this is a nice "problem" to have, and that this is more of an emotional issue than a financial one, i.e. letting go of my "dream" of never paying off these "low-rate" student loans early.