Investor asks whether to sell $16,000 of bond fund to pay off a 5.28% student loan versus continuing to DCA into brokerage.
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Hi all, looking for some advice re: the title.
I have 10 student loans totaling $38,000 with a blended rate of 4.63%. The largest of these 10 loans is about $16,000 with an interest rate of 5.28%. If you remove that large loan, the total drops to $22,000 with a blended rate of 4.16%.
I take home a little over $6,000 a month, rent is $1,300, and my monthly student loan payment is $500. No other major costs or debts. Live/work in a very high cost-of-living area.
I have $275,000 in investments, including a brokerage account (40/35/25 split between VTSAX/VTIAX/VBTLX), a 6-month VUSXX emergency fund, and a maxed-out Roth IRA all-in on VT.
I’m 26. At my age, some would say that my bond allocation is too large. My age/time in the market would (hopefully) give me the ability to “weather the storm” and not rely on bonds as a cash preservation vehicle.
Would it be wise to sell $16,000 worth of my bond fund to pay off the large $16,000 5.28% loan, or continue to invest in my brokerage via DCA as per usual. Let me know what you think. Thanks!