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I have $15,000 in loans left. I want to pay it off, in a 0% interest way. Thing is, GreatLakes doesn't take credit cards. So I'm looking into a large amount of Cash Advance, and then transferring that Cash Advance to another credit card, with a 0% balance transfer fee (There's plenty of offers out there for this)
Any advice? I can also pay with a check, and I've looked into a Balance Transfer Check, but they don't have an account number or routing number for me to input online (Both of which are needed)
I'm determined to pay off these loans next year, and I can do it if I'm not paying interest.
@Anonymous wrote:I have $15,000 in loans left. I want to pay it off, in a 0% interest way. Thing is, GreatLakes doesn't take credit cards. So I'm looking into a large amount of Cash Advance, and then transferring that Cash Advance to another credit card, with a 0% balance transfer fee (There's plenty of offers out there for this)
Any advice? I can also pay with a check, and I've looked into a Balance Transfer Check, but they don't have an account number or routing number for me to input online (Both of which are needed)
I'm determined to pay off these loans next year, and I can do it if I'm not paying interest.
1. A balance transfer from a loan doesn't need a routing number it needs the loan account number along with the payment name and address.
2. Cash advances are hugely expensive in most cases due to the cash advance fee + excessive interest rate; you would probably need a good credit union card or the Barclays Ring card, or something similar.
3. Maybe you should just pay them down directly. Student loans usually don't have high interest.
@Anonymous wrote:I have $15,000 in loans left. I want to pay it off, in a 0% interest way. Thing is, GreatLakes doesn't take credit cards. So I'm looking into a large amount of Cash Advance, and then transferring that Cash Advance to another credit card, with a 0% balance transfer fee (There's plenty of offers out there for this)
Any advice? I can also pay with a check, and I've looked into a Balance Transfer Check, but they don't have an account number or routing number for me to input online (Both of which are needed)
I'm determined to pay off these loans next year, and I can do it if I'm not paying interest.
I think you may be conflating Cash Advances and Balance Transfers. They are two VERY different things.
You plan is sound, IMO if you stick with BTs and know you can pay off the entire amount before the 0% offer runs out. Using a Cash advance is a bad idea.
Most lenders will issue you a Balance Transfer check which you can then write directly to your SL company or to yourself, depositing it into a bank account, then paying the SLs.
I'd highly recommend actually setting up the amortization table. I would find it highly unlikely that you would have an interest rate high enough that you would actually save money doing this.
Remember, you pay the balance transfer fee on the ENTIRE balance--loan APRs are only paid on the REMAINING balance. I'd ballpark the breakeven point for loan interest as 1.8x-2x of the balance transfer fee.
For example, if you pay a 4% fee, and your loan has a 7% interest rate, you actually LOSE $25. Obviously, if your loan rate is lower, the fee higher, or if you can pay more earlier, this can be even more signifcant.
Balance | $ 15,000 | |||
BT Fee | 4% | |||
Interest Rate | 7% | |||
Payment | Interest | Principal | Balance | |
1 | ($1,297.90) | ($87.50) | $1,210.40 | $ 13,790 |
2 | ($1,297.90) | ($80.44) | $1,217.46 | $ 12,572 |
3 | ($1,297.90) | ($73.34) | $1,224.56 | $ 11,348 |
4 | ($1,297.90) | ($66.19) | $1,231.71 | $ 10,116 |
5 | ($1,297.90) | ($59.01) | $1,238.89 | $ 8,877 |
6 | ($1,297.90) | ($51.78) | $1,246.12 | $ 7,631 |
7 | ($1,297.90) | ($44.51) | $1,253.39 | $ 6,377 |
8 | ($1,297.90) | ($37.20) | $1,260.70 | $ 5,117 |
9 | ($1,297.90) | ($29.85) | $1,268.05 | $ 3,849 |
10 | ($1,297.90) | ($22.45) | $1,275.45 | $ 2,573 |
11 | ($1,297.90) | ($15.01) | $1,282.89 | $ 1,290 |
12 | ($1,297.90) | ($7.53) | $1,290.37 | $ 0 |
Sum | ($15,574.81) | ($574.81) | $15,000.00 | |
BT Cost | $ 15,600 |
@RentSeeking
Is there somewhere online that makes it easy for math idiots such as myself to generate such a table?
@Aahz wrote:@Anonymous
Is there somewhere online that makes it easy for math idiots such as myself to generate such a table?
Excel is actually set up to do all of the heavy lifting for you with the PPMT, IPMT, and PMT functions. This guide does a very good job walking through the set-up.
EDIT: I'll note that one limitation of this method is that the PMT functions assume equal payments--accounting for prepayment is trickier, but seeing the total amount of interest paid in the equal-payment schedule gives a good place to start estimating (and is usually close enough for me).
@Anonymous wrote:
@Aahz wrote:@Anonymous
Is there somewhere online that makes it easy for math idiots such as myself to generate such a table?
Excel is actually set up to do all of the heavy lifting for you with the PPMT, IPMT, and PMT functions. This guide does a very good job walking through the set-up.
EDIT: I'll note that one limitation of this method is that the PMT functions assume equal payments--accounting for prepayment is trickier, but seeing the total amount of interest paid in the equal-payment schedule gives a good place to start estimating (and is usually close enough for me).
I didn't know about those Excel functions but typically I use one of the bankrate calculators; that does have some 1 time payment type options that you can play with but it too mostly deals with similarly sized payments each period rather than being able to ad hoc add additional payments at various times unfortunately.
http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx
Says mortgages but you can put in whatever you want for term and APR and the amortization table works well.
Glad you worked it out kaivorth - I was about to suggest avoiding the cash advance, because as South Jamaica pointed out, the fees would offset your benefit goals. And, while I am SADLY not as Great Lakes with any of my student loans, haha, I have many times read of people being able to pay by credit card via phone. So, go you, and congratulations on your newest credit liberty!