But if you carry student debt and you can still afford to pay the monthly loan, experts say you absolutely must.
Under the CARES Act, lenders are not required to pay federal student loan payments, and interest will not be charged on those loans. The temporary relief through the CARES Act was initially provided by September, but has since been extended to 31 December 2020.
“The zero interest rate is a profit for aspirants, regardless of their financial situation,” said Anna Helhoski, a student loan expert at Nerdwallet.
That said, if you can afford the monthly payment, there is one important reason you should keep paying.
All federal student loans benefit from the interest suspension of the CARES Act, which helps you repay the loan faster.
“If you already have a clean day fund and have not accumulated ‘bad’ debts (such as credit cards or personal loans), consider continuing with your student loan payments, even though they are not mandatory,” said Brian Walsh, CFO planning at SoFi, said.
Normally, a portion of a monthly student loan payment goes to interest, but under the CARES Act, the entire payment will go to the principal balance of the loan.
“If you can afford to continue repaying your federal loans, then it makes perfect sense to do so,” Robert Humann, general manager at financial services firm Credible, told CNN Business. “The more you owe, the more you can save if you continue to make your monthly student loan payments while waiting for interest.”
But, Helhoski said, “if your finances are in trouble and you need to take a step back, do it.”
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