It is human nature to immediately want to pay off all or some of your debts but it might not always be the best course of action.
DH and I have been meeting with financial planners and this is my takeaway.
Figure out if you could reasonably expect a higher or lower rate of return on investing the money than your loans are accruing interest.
For example, what can you expect to get as a return on any investments? It might be better to invest the entire amount and keep paying off the loans.
Using totally fake numbers:
$100,000 invested, earning 10% return on investment for 20 years would equal $672,749.99, total earning on investment of $572,749.99
$100,000 DVC loan, with 11.02% interest rate for 20 years would cost you a total loan amount of $248,051.96, total interest of $148,051.96
$50,000 student loan, with 8% interest rate for 20 years would cost you a total loan amount of $100,373.81. total interest of $50,373.81
So, investing the money would earn you $572,749.99 and repaying the loans would cost you $198,425.77. In this example you would come out ahead by around $375,000 at the end of 20 years.
Of course, it gets tricky when you are guessing the earnings on the investment because it is just that, a guess.
My mother just bought a new car, she had the option of paying it off in full by taking money out of her investments or taking a loan out for the car and making monthly payments. The car loan would have been at around 5% interest but her investments so far have had a return on investment of around 10% so for her, it was better to keep the money in her investments and take out the loan.
Depending on the amount you are receiving, you might want to have a meeting with a financial planner to run the numbers.