Top Mutual Funds To Pay Off A College Loan
Zacks Investment Research | Oct 23, 2019 09:12PM ET
For young graduates, paying off that vast student loan is a rather unpleasant aftertaste following the completion of their studies. But with the right financial planning, closing the overwhelming debt isn’t difficult. In this respect, young investors, eager to pay off their student loans, should consider adding mutual funds to their portfolio.
Successfully Investing to Unload a Student Loan
Strategies to build wealth in order to pay off a loan may vary from income requirements to interest charged on the student loan to how much one can put into a mutual fund.
To begin with, young investors should evaluate their student loan interest rate. Student loans are tax deductible, however, one would need to pay taxes as well. However, tax advantage does reduce the amount. Second, investors should invest in those mutual funds whose returns are higher than the interest they are charged on the student loan.
What makes mutual funds such a lucrative option in this case is the fact that one can choose from a vast number of investment options. Also, mutual funds are a great way to shield one’s money against market volatility since the investments are across diverse asset classes.
Plus, reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Original post
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