Anyone with debt wants to pay back that debt as early as possible. Then, they are free to live their life without having to look constantly over their shoulder. The logic is simple and self-explanatory, but that doesn’t make it correct. The truth is that some debts are best off being repaid in dribs and drabs than they are being paid back all at once. Although that doesn’t sound like a good plan, it is if you understand the mechanics. Here are a few reasons why you shouldn’t pay back your student loans as early as possible.

They Hardly Accrue Interest

The great thing about a student loan is that it isn’t like any other loan. Yours, for instance, doesn’t accrue interest over the course of your debt like any other loan. As the government is trying to help you better yourself, they are not worried about making money. Yes, you may have to repay more as they are subject to inflation. However, inflation tends not to rise too dramatically even over the course of years. As such, you’re better off keeping your money in savings accounts where it can build interest.

They Don’t Affect Your Credit Score

Contrary to popular belief, student loans don’t affect your credit score. So, even if you have $40,000 worth of debt, it won’t show up as long as it is all student loan debt. That means you can still get a great rate on a mortgage or apply for a credit card without fear of getting rejected. Paying off your student loan won’t affect any of these things, so what’s the point in paying it back all in one go?

They Are Void After 20 Years

This is the main reason that you should never pay back your loan early. After 240 months or 20 years, the government voids the loan. As such, you don’t have to pay back anything, and you don’t have to waste money on the repayments. Thanks to the Obama Loan Forgiveness, you can pay back $0 a month and still write the loan off. The general term is Student Loan Forgiveness, and you can learn more about the terms by following the link.

You Don’t Have To Pay Anything Back If You Don’t Earn Enough

Because the government has to be fair, they can’t take money from you unless you earn above a certain amount. The strategy ensures that people that do have to make repayments have enough to contribute and to live. Plus, it ensures that people that don’t have the money are not wasting what they have on student loans. If you are below the threshold, you won’t have to pay anything back. And, if you can do that over a twenty year period, you can beat the system.

Payments Are Small

If you do earn enough to contribute, the payments hardly make a dent in your wage packet. They are a very small percentage of your monthly wage, which means they won’t affect your finances.

Are you still thinking about paying your student loan back?