*Business questions>>>Personal Finance Questions

Best loans to pay off (or buy property)?

Question:
I am a couple years out of school with 2 major loans (both consolidated). One is around 40k with 3% interest, one around 30k with 6.25% interest. The monthly payments are $180 for the first and $300 for the second. I've been paying $250 on the first and my parents paying the second, but I will be getting a big raise and paying on both soon. I also have a 401k I'm contributing $50/month towards.

If I have approximately 600-700/month to pay towards loans (and 401k), how much should I pay towards each? Am I better off not putting any money towards the 401k?

My finacee is interested in buying a condo sometime in the next couple years as well. At this point am I better off renting (600-700/month) for a couple years, or buying property in a year (and paying the minimum on my loans since the extra money would go towards the condo)?

Answer:
You have an awesome interest rate on your student loan. Plus that the interests are tax deductible. I would say pay the minimum on the student loan and buy that condo.

My reasons is this, with those two loans, you are paying about 4.5% average nominal interest, but after you take the tax deduction into account, the interest rate drops to about 3.5%. This is a very good rate. You are really not paying any interest considering inflation is about 3% every year.

Pay the minimum on those loan and take the extra money and put it into a mortgage. Which is also deductible. You are saving 600-700 on rent every month + the property appreciation.