can i transfer my credit card loans to student loans?
Filed in Financial Aid on Oct.08, 2009
cummin65 asked:
i am currently a student with various student loans, as well as a few thousand dollars in credit card loans. outside of my school, is there any way to get a student loan to cover my current credit card balance? my home institution won’t do it, but are there any private creditors that will?
Melissa
i am currently a student with various student loans, as well as a few thousand dollars in credit card loans. outside of my school, is there any way to get a student loan to cover my current credit card balance? my home institution won’t do it, but are there any private creditors that will?
Melissa
October 8th, 2009 at 7:23 am
Leslie
No. You are not allowed to use student loans to pay your credit cards. All loan companies will check with the school to see if you actually need the money for tuition and dorm expenses. If those are all paid for already, no one will give you any money.
October 10th, 2009 at 10:45 am
Melissa
I don’t think there are any services that will consolidate a student loan with your credit card debt. I have seen where students will take out a bit extra in their loans and pay off their CCs with that, since the student loans are at a cheaper rate, and get even lower when you consolidate them after graduation.
You can find debt management services to help you with the CCs, or even get a line of credit with a bank, the rates will typically be 10% lower than most CCs (that’s at a high of 23-26% on the CC). Not great, but it still allows your payment to stretch further when paying off the CC. However, debt management services will do exactly what I state in the paragraphs below, when it comes to repayment. So it might be better for you to try it yourself first.
You have to understand that CCs, much like loan brokers, are looking to make their money first, so your payments up front will spend more going towards the interest payments than the principle. If you can pay over your minimums, you can pay it off that much faster. And if you have several CCs, start with the one that has the most balance on it, and the highest rate, pay it off first, and pay more than the minimum, then move that amount you were paying on the card to the NEXT, once the first card is paid off.
And with your student loans, you can save money on them by taking a graduated payment and consolidating them. However, there are drawbacks to consolidation, you are stuck paying them, you cannot defer or default IIRC.
Check out the links below for more advice on this area. I’ve read most of her books, she’s a great financial person.
October 10th, 2009 at 9:50 pm
Michele
if you take out a student loan next semester and use the proceeds to send a payment to your credit card, then the card will be paid. Since loans can be used for living expenses, such as, rent, utilities, fuel, auto maintenence. I used to have friends that took out loans to go on vacation during Spring break.
The thing is, your school will take whatever you owe them first then the rest is for you to use for your expenses. Deposit your balance into your checking account; then write a check for your payment. This eliminates one balance, just don’t make it a habit to use credit cards for impulse purchases, that is dangerous whether you are in school or not.
October 11th, 2009 at 3:11 pm
Clifford
no … no ….. no…….