However, the amount you can deduct each year in interest is the lesser of ,500 or the amount of interest you actually paid, according to the Internal Revenue Service.Therefore, holding onto your student loans just for this small tax break might not be the best idea.
Best way to pay off your student loans early If you’ve decided that paying off your student loans early is your best choice, what is the smartest strategy to do so?
The influence it has on your credit score is less than revolving debt, such as credit cards.
For this reason, paying off your credit cards first will have more of a positive impact on your credit score.
Getting rid of the debt once and for all means one less burden you’ll have to carry, and you can focus on investing for retirement or saving for a house.
The cons If you have other debt at a higher interest rate, such as credit card debt, then it makes more sense to pay that debt off first.
Related: Colleges Trick Parents on Financial Aid Awards Even if you can’t pay off your student loans in full, adding just a little extra money to your payments each month can still make sense.