hog88
Your ray of sunshine
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- Sep 30, 2008
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I find this funny because you're accusing people of being dumb when you're the one not thinking rationally. If I have a $10,000 loan that's interest free for one year, it'll still be $10000 this time next year. Suppose I have $10000 on hand. I can choose to pay the loan off now or invest it and get an expected 3% annual return. If I use the money to pay off the loan today, there is no loan, but my 10k is completely gone. If I invest it, next year I'll have $10,300 dollars. Then I can cash out, take 10k to pay off the loan, and pocket $300. What's smarter, to pay it off today or in a year?
Considering we're talking about people that don't have 10k in hand and didn't have it in hand at the beginning of the pandemic I'm calling them stupid, they were paying 4-6% interest when they could have paid it off.
But we're talking about people that for the most part were making minimum payments on their loans and if they just continued that during the interest freeze they would have essentially gotten a 4-6% return on those payments.