Does anyone store extra college loans into a savings account?

Question

I want to save any unused portions of my loans so I can start paying them back when I need to. I have about 6 more years left of school. I was thinking the interest might help me out a bit over the accumulated years. What type of savings account should I use to save my money?

Answer 1

ONLY do this if ALL of your loans are subsidized!

right now, loans guaranteed by the federal government cost 6.8% - more than twice what you'd earn in a good money market savings account!

BUT, if ALL of your loans are subsidized, then this could save you a bit of money.  If you do the math, you can assume that you'll earn about $20 for every $100 that you bank today over the next 6 years at 3% interest.  Plus, this would give you a bit of a cushion if you ever can't qualify for as much loan money for some reason.

most people don't do this, because they don't have 6 years left to earn interest.  in your case, though, this does make pretty good sense if your loans are subsidized.

I'd probably do it if i were you.

Answer 2

I put mine in a money market account but that was years ago Your best bet would be not to take out excess loans. Why not prepay the loan?