topic Re: Student Loans on Credit Cards? in Student Loans

Student Loans on Credit Cards?

CreditWarrior21 — Fri, 28 Apr 2017 19:19:05 GMT

I would be interested to know if anyone has paid down their student loans on Credit Cards? It would seem to me, that a credit card doesn't compound interest- therefore paying them down/off on CC's would be more cost effective.

For example: I owe 65K

Could I just throw 5K at a time on a CC- pay that off, and then put another 5K on it? So on and so forth?

Thoughts on this.

Thanks,

-S

Re: Student Loans on Credit Cards?

Anonymous — Sat, 29 Apr 2017 04:13:16 GMT

Why don't CCs compound interest? Also, student loans don't capitalize your unpaid interest if you're on an ibr plan which saves you from paying interest on interest unless you get a deferment or forebarance. As a result paying off a loan under the SL repayment plan will save you money in interest compared to a credit card.

Example, a $100 sl at 12% interest has $1 in interest that month. If you have a $0 ibr payment plan, next months interest is still calculated off the principle 100.

A $100 CC balance outside of grace at 12% apr has $1 interest the first month. If u somehow had a $0 payment the 2nd months interest would be calculated on $101 not the original principle of $100.

Re: Student Loans on Credit Cards?

CreditWarrior21 — Sat, 29 Apr 2017 18:53:51 GMT

Understood. I'm on a standard payment student loan repayment plan however. And after 10 years of paying I owe MORE today due to interest then I did 10 years ago.

It's insane.

Re: Student Loans on Credit Cards?

Anonymous — Tue, 02 May 2017 23:34:57 GMT

CreditWarrior, look into 0% Balance transfer cards, figure out the max amount you can pay down your student loans in the given 0% time frame and then transfer that amount to the card. You can save a ton in interest.

Re: Student Loans on Credit Cards?

CreditWarrior21 — Wed, 03 May 2017 14:52:28 GMT

Thank you! good advice.

Currently, my student loans are at 6.7% so it is KILLING me. I love the 0% CC idea.'

We are closing on my first house (thanks to the help on the forums) on May 31st. The month after, I am going to take you up on that idea.

Financial Wellness 2017 and beyond!