Reply

Student Loan for Credit Card debt? (pay, charges, credit report, accounts) – Personal Finance -debt, loans, credit playing cards, banks, insurance…

Reply

Start New Thread


 


Old

03-30-2013, 02:48 PM

 
13 posts, learn 55,865 occasions

Reputation: 14

Here’s my state of affairs, and would love any ideas.

I’m 30 years previous, beginning graduate college, and have the usual Stafford $20,500 loan provide. I’ll seemingly solely want about $6,000 a 12 months for books and tuition as a result of I can be attending half time and my employer can be paying for some tuition. I do know that is the fallacious discussion board, however does anyone know if that is paid out without delay to start with of the college 12 months, or every quarter?

Anyway, between my husband and I, we have now about $14,000 in credit card debt – with insane rates of interest that jumped to one thing like 22%. We should not loopy spenders, and solely used that cash to dwell on for groceries, gasoline, hire, and different requirements after we had been each job looking and had a household tragedy that price us $7,000 in journey and funeral bills (lengthy story) 2 years in the past. Now we simply pay what we will on these two playing cards and solely dwell on money, however a lot of our funds finally ends up being curiosity.

We are contemplating taking that Stafford loan and simply paying off our credit playing cards in a single lump sum (if it is paid out without delay, as a substitute of quarterly), after which instantly begin placing the cash we paid credit card funds with onto the loan (and never ready till I’m out of faculty). The curiosity distinction alone makes this very tempting, and I do know it isn’t normally beneficial to pay a loan with one other loan, however once more, we’re tremendous frugal and are not nervous within the least about placing a refund on the playing cards (they don’t seem to be maxed and have sat in our wallets untouched for over a 12 months).

To add, we’re wanting to purchase a home within the coming years, and have learn that having a student loan stability seems a lot better than having a credit card stability as a result of it is “good” debt (although we glance to have that paid off ahead of later). Any perception into this? Also would our credit go down as a result of we can pay the playing cards off in a single lump sum and are not utilizing/making common funds on them, or go up as a result of we have now a low debt/revenue ratio on mentioned playing cards (we aren’t closing them, simply letting them sit) and are making common funds on the loan? How do lenders take a look at this?

I need to be certain I’m pondering this right through with as a lot info as I can collect, so ideas, experiences, and ideas could be so nice. I do know I’ve questions starting from student loans, to homebuying, to credit card debt, so thanks prematurely for coping with my put up.

 


Old

03-30-2013, 03:11 PM

 

Location: Alexandria

142 posts, learn 616,241 occasions

Reputation: 153

School loans are usually dispersed on the begining of the quarter/semester. So in case you qualify for 20,500 yearly, you’d obtain round 6800 per quarter (3 quarters) and 10,250 per semester. And look into your employer tuition help program; most if not all reimburses after passable completion of the programs.

In regards to purchasing a house, college loans are thought-about installment funds which is able to have an effect on your credit rating and accordingly your rate of interest. The minimal month-to-month college loan fee will “reduce” the mortgage quantity you and your husband would in any other case qualify for (primarily based in your gross pay, different minimal monetary obligations, and your rate of interest). So, in case you’re not in reimbursement, college loan can have “minimal” have an effect on on the mortgage (other than the credit rating) you could qualify for.

As for credit playing cards, holding all the things in your life fixed, you are credit rating will go up resulting from a lower in your debt/credit ratio. As lengthy as you do NOT miss any funds till the stability is paid off, it doesn’t matter in case you make a big fee each different month. Also, maintain your accounts open after paying off the balances… however you already knew that

 


Old

03-30-2013, 03:15 PM

 
16,108 posts, learn 21,694,907 occasions

Reputation: 26526

No. Not a good suggestion in any respect to pay credit playing cards w/ student loans. The reverse could be higher. Then in case you turn out to be destitute you may discharge credit playing cards….student loans are with you for all times.

 


Old

03-30-2013, 03:28 PM

 

Location: Alexandria

142 posts, learn 616,241 occasions

Reputation: 153

The OP acknowledged they use money for all the things after servicing their month-to-month CC funds.

As lengthy as your not charging to your card and also you and make sufficient to cowl the anticipated month-to-month college loans, I do not see a difficulty together with your plan.

 


Old

03-30-2013, 03:47 PM

 

Location: Florida –

9,857 posts, learn 12,384,988 occasions

Reputation: 20477

My son piled-up some important credit card debt when he was in faculty (largely leisure, since he was on a full scholarship trip). He then acquired some Stafford loans to pay for Grad. college — however, really used these loans to repay his increased curiosity credit card debt. He delayed taking his remaining Comps. and ending grad college, because the college loan due date did not begin till 6-months after commencement. He then took a job with an organization the place he had labored throughout faculty as an intern. With his then six-figure revenue, he was in a position to rapidly paid off his faculty loans … (and people of his spouse.)

All the whereas, I had been counseling him about having to ‘pay the piper’ in some unspecified time in the future, however, he was in a position to work issues out in order that he virtually fully averted a heavy debt load and corresponding ache. Was {that a} ‘sensible’ factor to do? …. most likely — besides typically slightly monetary ache and issue in the course of the early phases of our lives, isn’t fully a nasty factor. He’s executed fairly effectively since then, however, at all times with the expectation that life can be ‘straightforward.’

 


Old

03-30-2013, 04:01 PM

 
13 posts, learn 55,865 occasions

Reputation: 14

Quote:

Originally Posted by tmoua1
View Post
School loans are usually dispersed on the begining of the quarter/semester. So in case you qualify for 20,500 yearly, you’d obtain round 6800 per quarter (3 quarters) and 10,250 per semester. And look into your employer tuition help program; most if not all reimburses after passable completion of the programs.

In regards to purchasing a house, college loans are thought-about installment funds which is able to have an effect on your credit rating and accordingly your rate of interest. The minimal month-to-month college loan fee will “reduce” the mortgage quantity you and your husband would in any other case qualify for (primarily based in your gross pay, different minimal monetary obligations, and your rate of interest). So, in case you’re not in reimbursement, college loan can have “minimal” have an effect on on the mortgage (other than the credit rating) you could qualify for.

As for credit playing cards, holding all the things in your life fixed, you are credit rating will go up resulting from a lower in your debt/credit ratio. As lengthy as you do NOT miss any funds till the stability is paid off, it doesn’t matter in case you make a big fee each different month. Also, maintain your accounts open after paying off the balances… however you already knew that

That is tremendous useful, thanks! Can you develop on the “installment payments” definition and the “not in repayment” half? I’m not 100% I perceive, however this monetary jargon is all very, very new to me. And the final half is nice: I really feel assured in constant funds – I’ve had credit playing cards since I used to be a teen to assist construct credit (thanks, mother!) and have by no means as soon as missed any fee on something in order that’s a aid that with this potential plan our credit would go up and never down.

Quote:

Originally Posted by JanND
View Post

No. Not a good suggestion in any respect to pay credit playing cards w/ student loans. The reverse could be higher. Then in case you turn out to be destitute you may discharge credit playing cards….student loans are with you for all times.

I’ve learn that as effectively, however that is the place my query of ‘good’ debt vs ‘dangerous’ debt got here from: since a student loan reveals an funding in my future, I wasn’t certain if that is higher than having ‘dangerous’ credit card debt with no worth.

Quote:

Originally Posted by Fargobound
View Post

Unless you’re chopping the playing cards, there’s a excessive likelihood you’ll be again in credit card debt.

Quote:

Originally Posted by tmoua1
View Post
The OP acknowledged they use money for all the things after servicing their month-to-month CC funds.

As lengthy as your not charging to your card and also you and make sufficient to cowl the anticipated month-to-month college loans, I do not see a difficulty together with your plan.

Indeed – we’ve not lower up our playing cards and so they simply stare at us in our wallets – and have not touched them in over a 12 months. We are fairly disciplined and solely had them racked up a couple of years again to some uncontrollable circumstances. I do not know the anticipated month-to-month loan funds, however resulting from a quickly change within the husband’s job, I anticipate we’d have the ability to put down as much as $2000-3000 a month both on the loan or away in financial savings or a combo of each.

I suppose my greatest concern for 2013 is to give up paying such excessive curiosity and to ‘look good’ on paper for after we are prepared to purchase our home as I do know it takes some time of making ready and planning to get to that time.

 


Old

03-30-2013, 04:04 PM

 
13 posts, learn 55,865 occasions

Reputation: 14

Quote:

Originally Posted by jghorton
View Post
My son piled-up some important credit card debt when he was in faculty (largely leisure, since he was on a full scholarship trip). He then acquired some Stafford loans to pay for Grad. college — however, really used these loans to repay his increased curiosity credit card debt. He delayed taking his remaining Comps. and ending grad college, because the college loan due date did not begin till 6-months after commencement. He then took a job with an organization the place he had labored throughout faculty as an intern. With his then six-figure revenue, he was in a position to rapidly paid off his faculty loans … (and people of his spouse.)

All the whereas, I had been counseling him about having to ‘pay the piper’ in some unspecified time in the future, however, he was in a position to work issues out in order that he virtually fully averted a heavy debt load and corresponding ache. Was {that a} ‘sensible’ factor to do? …. most likely — besides typically slightly monetary ache and issue in the course of the early phases of our lives, isn’t fully a nasty factor. He’s executed fairly effectively since then, however, at all times with the expectation that life can be ‘straightforward.’

Thanks for sharing!! I’m form of pondering alongside the identical traces, and with my husband’s revenue (and mine, as I’ll nonetheless be working full time throughout college), suppose we will even begin paying ahead of commencement and decrease our debt to revenue ratio even additional.

 


Old

03-30-2013, 04:10 PM

 
13 posts, learn 55,865 occasions

Reputation: 14

After studying via some posts and pondering extra about this, I’ve a observe up query:

Would accepting a Stafford Loan to start with damage my credit rating? Like in the identical manner I used to be hypothetically informed to not purchase a brand new/used automobile earlier than searching for a house loan as a result of that may primarily elevate my debt to revenue ratio till I begin paying it off?

So in my case, I’d have $13,000 in credit card debt and $20,500 in student loans, trying like I had $33,500 in debt. I’d instantly pay that $13,000 however how lengthy would it not take for my credit rating to rebalance?

 


Old

03-30-2013, 04:19 PM

 

Location: Southern New Hampshire

8,378 posts, learn 14,479,429 occasions

Reputation: 27094

Quote:

Originally Posted by captainpants
View Post
After studying via some posts and pondering extra about this, I’ve a observe up query:

Would accepting a Stafford Loan to start with damage my credit rating? Like in the identical manner I used to be hypothetically informed to not purchase a brand new/used automobile earlier than searching for a house loan as a result of that may primarily elevate my debt to revenue ratio till I begin paying it off?

Depends. If you will be in grad college for a few years and thus not must pay (assuming your loan is backed, not unsubsidized), then your student loan will not (but) present up as a debt. It will sometime, although, after all.

Quote:

Originally Posted by captainpants
View Post

So in my case, I’d have $13,000 in credit card debt and $20,500 in student loans, trying like I had $33,500 in debt. I’d instantly pay that $13,000 however how lengthy would it not take for my credit rating to rebalance?

With my playing cards, usually they’re present inside 1-2 months (at the very least from what I’ve seen). So your credit report might present 1 month with $33,500 complete debt, but it surely ought to present -0- credit card stability by the subsequent month.

BUT, as another person identified, student loans are NOT usually paid in a single lump sum — they’re paid by semester or quarter. So you will not HAVE a lump of $20,500 to make use of to repay the debt.

Please register to put up and entry all options of our extremely popular discussion board. It is free and fast. Over $68,000 in prizes has already been given out to lively posters on our discussion board. Additional giveaways are deliberate.

Detailed details about all U.S. cities, counties, and zip codes on our web site: City-data.com.


READ:   Understanding Your ACS Student Loan

Leave a Reply

Your email address will not be published. Required fields are marked *