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Valued Contributor
parakleet
Posts: 1,127
Registered: ‎04-13-2013

Need payment strategy advice with BT promos and student loan

I have about 5k of CC debt that I plan on doing BTs on to my new cards (Slate, Discover it) with 0% BT promos. I also have about 15k in private student loans at 9.875%. I had originally planned on paying off the CC debt first during the promo period and pay the minimum on the loan in the meantime. After the CC is paid off, I would then focus on the loan. I know that if I'm just paying the minimum on the loan, it's just accruing a ton of interest. Is there a particular way that would be best in paying down both? I thought about still focusing on the CC but maybe pay a little bit extra on the loan.

Gardening since 4/13/14
Current: EQ 700 Apr '14; EX 724 Apr '14 TU 716 Apr '14
Goal: 760+
Established Contributor
pakman92
Posts: 650
Registered: ‎03-01-2012

Re: Need payment strategy advice with BT promos and student loan


parakleet wrote:
I have about 5k of CC debt that I plan on doing BTs on to my new cards (Slate, Discover it) with 0% BT promos. I also have about 15k in private student loans at 9.875%. I had originally planned on paying off the CC debt first during the promo period and pay the minimum on the loan in the meantime. After the CC is paid off, I would then focus on the loan. I know that if I'm just paying the minimum on the loan, it's just accruing a ton of interest. Is there a particular way that would be best in paying down both? I thought about still focusing on the CC but maybe pay a little bit extra on the loan.

I think focusing on CC debt is the right thing.  Higher interest...


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Valued Contributor
boomhower
Posts: 1,863
Registered: ‎09-20-2011

Re: Need payment strategy advice with BT promos and student loan

Assuming your minimum loan payment at least covers the interest then yes, that's the way to go.  If not at least pay enough to cover the interest for the month. 

Contributor
mojobones89
Posts: 252
Registered: ‎01-21-2013

Re: Need payment strategy advice with BT promos and student loan


parakleet wrote:
I have about 5k of CC debt that I plan on doing BTs on to my new cards (Slate, Discover it) with 0% BT promos. I also have about 15k in private student loans at 9.875%. I had originally planned on paying off the CC debt first during the promo period and pay the minimum on the loan in the meantime. After the CC is paid off, I would then focus on the loan. I know that if I'm just paying the minimum on the loan, it's just accruing a ton of interest. Is there a particular way that would be best in paying down both? I thought about still focusing on the CC but maybe pay a little bit extra on the loan.

i would have full focus on the cc's and pay them off to gain that maximum fico score improve,plus with that in mind,once your score update and go up you can see if your student loans interest can go down,saving you even extra money in the long run and with that extra money you can pay that extra into it and paying the damn thing quicker.

New Contributor
wenbev
Posts: 62
Registered: ‎08-01-2012

Re: Need payment strategy advice with BT promos and student loan

I was thinking it would make sense to go hard on the student loans, after trying to get a int rate reduction.  Slate and Disco both offer 12-18mo 0% int on BTs.  I'd go for doing extra payments on the student loans to knock down the principal or paying them weekly or biweekly to reduce the principal faster (I'm actually doing that now, paying SLs weekly) for at least 6-8 months. Or at $5K you would pay $278/mo for 18 months and still have money to knock down your SLs.  I guess it depends on how much disposable $ you have to play with after essentials and savings are considered. 

Valued Contributor
parakleet
Posts: 1,127
Registered: ‎04-13-2013

Re: Need payment strategy advice with BT promos and student loan


pakman92 wrote:

parakleet wrote:
I have about 5k of CC debt that I plan on doing BTs on to my new cards (Slate, Discover it) with 0% BT promos. I also have about 15k in private student loans at 9.875%. I had originally planned on paying off the CC debt first during the promo period and pay the minimum on the loan in the meantime. After the CC is paid off, I would then focus on the loan. I know that if I'm just paying the minimum on the loan, it's just accruing a ton of interest. Is there a particular way that would be best in paying down both? I thought about still focusing on the CC but maybe pay a little bit extra on the loan.

I think focusing on CC debt is the right thing.  Higher interest...


Yeah, that's what I figured. Ultimately, when the BT promo period expires, I'll have to deal with the debt regardless. 


Gardening since 4/13/14
Current: EQ 700 Apr '14; EX 724 Apr '14 TU 716 Apr '14
Goal: 760+
Valued Contributor
parakleet
Posts: 1,127
Registered: ‎04-13-2013

Re: Need payment strategy advice with BT promos and student loan


boomhower wrote:

Assuming your minimum loan payment at least covers the interest then yes, that's the way to go.  If not at least pay enough to cover the interest for the month. 


The minimum does cover the interest and a very small amount of the principal. Looking at the amortization table is not good for the soul! :smileywink:


Gardening since 4/13/14
Current: EQ 700 Apr '14; EX 724 Apr '14 TU 716 Apr '14
Goal: 760+
Valued Contributor
parakleet
Posts: 1,127
Registered: ‎04-13-2013

Re: Need payment strategy advice with BT promos and student loan


mojobones89 wrote:

parakleet wrote:
I have about 5k of CC debt that I plan on doing BTs on to my new cards (Slate, Discover it) with 0% BT promos. I also have about 15k in private student loans at 9.875%. I had originally planned on paying off the CC debt first during the promo period and pay the minimum on the loan in the meantime. After the CC is paid off, I would then focus on the loan. I know that if I'm just paying the minimum on the loan, it's just accruing a ton of interest. Is there a particular way that would be best in paying down both? I thought about still focusing on the CC but maybe pay a little bit extra on the loan.

i would have full focus on the cc's and pay them off to gain that maximum fico score improve,plus with that in mind,once your score update and go up you can see if your student loans interest can go down,saving you even extra money in the long run and with that extra money you can pay that extra into it and paying the damn thing quicker.


I hope to be able to lower/renegotiate my interest rate with Discover (my student loan lender) but I'm not too optimistic. I'm not even sure if they do renegotiate terms on a private loan. :smileysad: 


Gardening since 4/13/14
Current: EQ 700 Apr '14; EX 724 Apr '14 TU 716 Apr '14
Goal: 760+
Valued Contributor
parakleet
Posts: 1,127
Registered: ‎04-13-2013

Re: Need payment strategy advice with BT promos and student loan


wenbev wrote:

I was thinking it would make sense to go hard on the student loans, after trying to get a int rate reduction.  Slate and Disco both offer 12-18mo 0% int on BTs.  I'd go for doing extra payments on the student loans to knock down the principal or paying them weekly or biweekly to reduce the principal faster (I'm actually doing that now, paying SLs weekly) for at least 6-8 months. Or at $5K you would pay $278/mo for 18 months and still have money to knock down your SLs.  I guess it depends on how much disposable $ you have to play with after essentials and savings are considered. 


I'm not sure if Discover (student loan lender) would modify the terms of the loan. I probably have better credit than when I took out the loan so I may give that a go. I don't have enough disposable income to knock out both of the debt at the rate I'd like so that's why I was wondering if there might be better "strategy." I'm probably making things more complicated than they are! lol. I'm just so tired of being in debt! :smileyfrustrated:


Gardening since 4/13/14
Current: EQ 700 Apr '14; EX 724 Apr '14 TU 716 Apr '14
Goal: 760+
Valued Contributor
FocusedAndDetermined
Posts: 6,239
Registered: ‎01-05-2013

Re: Need payment strategy advice with BT promos and student loan

Without knowing how much you have to apply toward all balances, it's difficult to say precisely.  Based on the info provided, I agree with the others, who say pay the CCs first.  If you can clear them up during the 0% phase, by all means do it.  If you can't then still tackle the CCs the most, since the interest rates will be higher than your loan rate.

 


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