Due to the Covid19 pandemic, the Federal student loan rate has been changed to 0% until September 30, 2020. So, is now the best time to pay off your student loans? While this may be a great opportunity to pay toward your loans, it’s not necessarily the thing you should be focusing your money on right now.
There is a common misconception that with the current rate of 0%, the loans are interest free — wrong. If your loan had already begun accruing interest before this temporary rate was put in place, you will still have to pay that interest. So, though you don’t have more interest currently accruing , you still have to pay the interest that already accrued. Then in October, the interest will start accruing again.
How do you figure out if you should be paying off your student loans now? Follow these 3 steps: