@Sk323i wrote:I have 60K cash
I have 59K in students loans at 4.2%
I have 59K in HELOC at 8%
What is better to pay off given taxes, and depreciations, and capitalized interest, etc. ?
Assuming your marginal tax rate is up in the 20% range, and without running the numbers, my gut tells me you'd be better off paying off the student loans.
@Sk323i wrote:What's the correct way to look at this though ? Instead of gut feeling ?
In your shoes, I'd look at your tax return for 2023; how much of a deduction did you get for your HELOC interest and then equate that to how large the reduction was on the taxes you needed to pay for both Federal and State (if applicable). If the reduction in taxes was larger than the interest you paid on the student loans, then pay them off, if it wasn't then pay off the HELOC.
I would not pay either at one time.
Maybe $2k each every month for the next 15 months or so for cash flow.
If not, I would bank a year of SL payments and apply the rest to HELOC.
JMO.
