Do inflation cancel my loan interest?
Will my student loan interest rate and the rate of inflation cancel one another out? Thanks to law school, I currently have about 60k in student loans. About 43k of that is locked in at 2.625% The remaining amount is locked in at 4.5%.
The long-term average inflation rate is 3.42% and, by the decade, hasn’t dropped below 2.6% since the 1960s.
My question: does the inflation rate paired with my interest rate mean that I am effectively paying 1% on part of my loan and actually making 1% on the larger chuck? Logically, this seems to make sense and, following that, there is no harm and possibly even some benefit to paying these things off as slowly as possible.
Of course, I could be completely wrong and I can’t find any Internet site or online calculator to back me up. Can the hive help?
Original text: Do inflation cancel my loan interest?
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