I have about $21k in student loans and make $75k a year. The student loans are split into 6 different loans. I’m currently using the debt avalanche to tackle them, and I’m way ahead on the payments (if I only make the minimum payment plus my company’s monthly contribution, they’ll be gone < 5 years). Being ahead is mostly due to signing bonus, relocation lump sump, and tax return, not monthly income, although I pay extra when I can. I’m currently contributing 8% (minimum contribution to get full company match) into a Roth 401(k) and saving $500/month for a 3 month emergency fund. I also put $250/month into a brokerage account.
I’ve been considering taking the Dave Ramsey approach and pulling out of my 401(k) and stopping my emergency savings and just annihilating those student loans in about a year. I wanted to ask: would that be a good idea? Obviously, I’m very lucky to be where I’m at and I’m by no means in a dire financial mess, which is what is holding me back from relentlessly attacking the debt. Also, the sooner the student loans are gone, the more money that’s left on the table from my company since they contribute $100/month, up to $9,000, which would take 7 years (this is kind of a weak argument, but I still think about it).
Edit: weighted average interest rate on the student loans is 4.61%. All federal. I pay just under $100 in interest per month, which is essentially covered by the company contribution.