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Registered: ‎11-26-2012
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Balance transfer part of student loan debt to 0% APR card? Possible?

So I have a lot of student debt that I will have to pay off once I finish off my last year of law school.  Since the interest rates are so high on those (the majority are GradPlus with a 7.9% interest rate), I was wondering about the possibility of balance transferring to a introductory 0% apr, 0% bt fee card.  The Chase Slate seems like the most appropriate card.  Is this allowed?  Say I get a Slate with a 10k limit, could I bt 10k from my student loans and then pay off the Slate during the introductory period?  My salary will be 160k, so paying it off during the introductory period doesn't seem like it would be difficult.  Even for cards with a 3% bt fee (most of them aside from the Slate it seems), this rate is still far lower than the Gradplus interest rate.  I'm just not sure if credit card company allows balance transfers of federal loan debt.

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Posts: 346
Registered: ‎02-01-2012
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Re: Balance transfer part of student loan debt to 0% APR card? Possible?

[ Edited ]

Although I'm not 100 percent sure I would say no. The reason is quite simple...if you were able to pay student loans off with credit cards you can always max out cards and file bankruptcy. Many years ago Doctors and Lawyers would take out huge amounts of student loan debt, file bankruptcy, and have all the income to themselves. That is the main reason now student loan debt can't be discharged. That is pretty much why you can't pay your student loans with credit cards now unless they are really late and after that point your credit card company may figure out you are in serious debt and do AA on the card. The best bet you can do is try and consolidate those loans to a lower fixed rate one. If you can't you will probably have to send double the minimum payment. It's a good thing you already have a job with that high of a salary already set up. Good Luck!

 

Edit: I should have added before but it slipped my mind. You can pay debts off using checks that the credit card company can send you from the card. So in theory if they send you the checks you can write them out to the loan holder. Again...in the current economy banks usually watch the activity on cards and would probably realize the payment plan and consider it risky which can lead to AA. 

Contributor
Posts: 130
Registered: ‎11-26-2012
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Re: Balance transfer part of student loan debt to 0% APR card? Possible?

Regarding the edit, that's actually what I thought a balance transfer was--the bank sends you a check, you use that check to pay the existing balance, and then the amount is taken out of your new credit line on the new card.  That's what I was thinking of doing anyway.

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Re: Balance transfer part of student loan debt to 0% APR card? Possible?

I just actually heard a radio talk show host suggest to someone to BT chunks at a time to a low rate cars
Especially if your credit is good.

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Registered: ‎02-01-2012
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Re: Balance transfer part of student loan debt to 0% APR card? Possible?


nickn86 wrote:

Regarding the edit, that's actually what I thought a balance transfer was--the bank sends you a check, you use that check to pay the existing balance, and then the amount is taken out of your new credit line on the new card.  That's what I was thinking of doing anyway.


It depends. Some banks request the account numbers because they expect it to pay credit cards and want those accounts closed. Some don't send checks out as they fear you write the checks out to yourself and get it all cash. Every bank does things in a certain way. 

Contributor
Posts: 130
Registered: ‎11-26-2012
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Re: Balance transfer part of student loan debt to 0% APR card? Possible?

Interesting, I've never transferred a balance before so I wasn't sure.

I still have about a year until I have to make my first payments.  I think I'm going to try to get my credit limits up so I can give this a shot.  I'm planning on paying 30 to 40k (this is why law school isn't the greatest idea) a year anyway on loans, so I might try to get a bt card with a 20k limit in about a year.  If it doesn't work, I'll just have to pay the old fashioned way.

http://www.thefinancialstudent.com/2011/01/24/a-crazy-idea-balance-transfer-your-student-loan-debt-a...  this article seems to endrose this practice.


CC365 wrote:

nickn86 wrote:

Regarding the edit, that's actually what I thought a balance transfer was--the bank sends you a check, you use that check to pay the existing balance, and then the amount is taken out of your new credit line on the new card.  That's what I was thinking of doing anyway.


It depends. Some banks request the account numbers because they expect it to pay credit cards and want those accounts closed. Some don't send checks out as they fear you write the checks out to yourself and get it all cash. Every bank does things in a certain way. 


 

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Posts: 608
Registered: ‎10-11-2012
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Re: Balance transfer part of student loan debt to 0% APR card? Possible?

My Citi AMEX lets me BT to my personal account so that I can do whatever I want with the money.  It still has the same interest rate, which for the next year is 0%.  If I had a balance I wanted to transfer, I would do it that way.


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Re: Balance transfer part of student loan debt to 0% APR card? Possible?

Keep in mind that you will lose the benefits of your federal loans that would protect you in the case of income loss, disability, or death. You might want to think twice about giving up your rights.

 

A credit card company isn't going to care if you lose your job. The payments on federal loans can change as your life situation changes. I know we all think we're invincible and that those things would never happen to US...but they do happen, and not always to the 'other guy.'

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