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Should I use put extra money toward paying off my student loans or investing in an index fund?
First, I'd like to congratulate you on your financial discipline in paying off your loans and living well within your means.  I have friends who make more than twice your salary with similar debt obligations, and they barely scrape by month to month. If we combine your student loan debt and unallocated income each month, we get about $1,350.  You say that $378 per month is the minimum payment for your loans, which have an average interest rate of about 3.5%.  Thus, you have about $1,350 a month to "invest." Making your loan payments is basically the same as investing with the same return as the loan interest rate, when it comes down to it.  An interest rate of 3.5% is...not great, all things considered, and barely above inflation.    However, that's a guaranteed return of 3.5%, more or less like a bond.  As noted previously, the stock market historically averages 10% before inflation over the long run. The US stock market is right around its historic high at this point (DJIA is at 20,700 today, April 6th, 2017 - historic high hit just over 21,000 on March 1, 2017).  Obviously, no one can predict the future, but I get the feeling that a market correction may be in order, especially depending on how things go in Washington in the next weeks or months.  If that's the case (again, we have no way of knowing if it is), you'd be foolish to invest heavily in any stocks at this point. What I would do, given your situation, is invest the $1,350/month in a "portfolio" that's 50/50 stocks and "bonds," where the bonds here are your student loans.  Here, you have a guaranteed return of ~3.5% on the bond portion, and you can still hedge the other 50% on stocks continuing their run (and also benefiting from dividends, capital gains, etc. over time).  I would apply the extra loan payments to the highest-interest loan first, paying only the minimum to the others.  Once the highest-interest loan is paid off, move onto the next one. Once you have all your loans paid off, your portfolio will be pretty much 100% stocks, at which point you may want to add in some actual bonds (say a 90/10 or 80/20 split, depending on what you want).  I'm assuming you're pretty young, so you still have plenty of time to let the magic of compounding interest do its work, even if you happen to get into the market right before it drops (well, that, and the fact that you won't really have much invested anyway). Again, let me stress that neither I nor anyone else has any way of knowing what will happen with the market - I'm just stating my opinion and what my course of action would be if I were in your shoes.