Just wondering what everyones' thoughts are on these.
It's basically 0% for 12 months with a 3% fee.
I'm contemplating on writing a check to Sallie Mae for one of my student loans that sits at 6.55% interest. I have like 9 loans total from Sallie Mae so this would knock one out and save me 3.55% interest over the course of 12 months - I believe Sallie Mae loans accrue interest on a daily rate.
Does anyone know if there's a minimum payment each month if you use this? Or can I just leave the entire balance on my card and pay it off in one big payment at the 12 month mark?
Pros:
-Save on interest
Cons:
-Max out Utilization on this card and potentially reduce my FICO score? (I have about $40k in total CLI so this would keep me at around 20-25% constant for a year - it might actually be a good thing showing that I'm actively using my credit - my credit otherwise is paid in full every month)
-One of the 9 student loan trade lines will be closed out and won't age like the rest lowering my AAoA a bit (or does student loan lines not count towards AAoA?)
Yes there is a minimum payment. After the one year if not paid off any savings will quickly be eaten up by the credit card APR when it goes back to the cards set APR.
Discover IT $17k / US Bank Ace (VSig) $13.5K / US Bank Cash+ (VSig) $13.5k
If you have the money to pay down the Sallie Mae every month... Then 3% up front saves you $58.28 per $10,000 compared to 6.55% over a reducing balance each month. 
Is that worth it?
Is that worth it?
@lhcole77 wrote:
They count towards AAoA. Upside is it will stay on for 10 years after being paid off, with no immediate hit to AAoA. Also having another account report a 0 balance is a plus.
"save me 3.55% interest over the course of 12 months" ==> what does this mean? Is loan at 3.55 APR or 6.55 APR?
My student loan that I'd apply the check to is 6.55 APR. The check is 3% fee off the bat so I'd save 3.55 APR (plus the compouding interest) for a 12-month period.
@rlx01 wrote:
If you have the money to pay down the Sallie Mae every month... Then 3% up front saves you $58.28 per $10,000 compared to 6.55% over a reducing balance each month.
Is that worth it?
It could be... Just a simple calculation shows that $7,500 (my CLI) at 6.55% is ~$491 split over 12 months in interest; at 3.55% it is ~$266.
Or ~$20/mo or $240 for the year; that's not factoring in what might accrue from the daily compounding interest being capitalized on the student loan.
Doesn't seem like much but it can add up; especially when I'm living like a hobo - only expenses are food (think frozen dinner and a yogurt for lunch), gas for the car to/from work, and house mortgage/utility bills that I split with my parents and brothers. Don't really have entertainment expenses (maybe a $10 movie ticket once or twice a year). Otherwise I'm at home watching TV shows or movies on my computer or playing comupter games when I'm not studying for IT certifications.
I'm fairly confident in my ability to repay the full amount by the end of the 12 month period too since I'm extremely frugal at this point; and probably will be for quite some time even after the loans are paid off.
@Anonymous wrote:Yeeeeeeep.
And if you like to keep your accounts i'd suggest paying more than that.
Do you mean if I pay only they minimum Cap1 and the other creditors might slash my credit limits and close my cards on me? I've never really carried a balance at all my entire credit life so not sure how closely they keep an eye on things like what I'm considering.
Figured I'd pay the minimum on the Cap1; put the freed up income towards my student loans, and then plan accordingly so that I can pay the remaining Cap1 balance in full at the 12 month mark.
I'd be skirting the edge with no actual emergency/savings fund while I do this but I can fall back on my family for support worst case scenario. The project I just joined is a 5 year task order so I do have some job security assuming I don't get fired for incompetance - they put me in for a clearance plus I was internal so I'm not sure they'd be all that fast to get rid of me and start looking for another person internal/external and potentially pay to put them in for their clearance.
I'm just rambling now.
@iDShaDoW wrote:
@Anonymous wrote:Yeeeeeeep.
And if you like to keep your accounts i'd suggest paying more than that.
Do you mean if I pay only they minimum Cap1 and the other creditors might slash my credit limits and close my cards on me? I've never really carried a balance at all my entire credit life so not sure how closely they keep an eye on things like what I'm considering.
Figured I'd pay the minimum on the Cap1; put the freed up income towards my student loans, and then plan accordingly so that I can pay the remaining Cap1 balance in full at the 12 month mark.
I'd be skirting the edge with no actual emergency/savings fund while I do this but I can fall back on my family for support worst case scenario. The project I just joined is a 5 year task order so I do have some job security assuming I don't get fired for incompetance - they put me in for a clearance plus I was internal so I'm not sure they'd be all that fast to get rid of me and start looking for another person internal/external and potentially pay to put them in for their clearance.
I'm just rambling now.
I'd take Nixon's doomsdaying with a grain of salt.