How much can I save if I transfer student loans to a zero percent credit card? Is this doable and can I then roll it onto other cards after one year?
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should i transfer student loan to a 0 apr credit card;
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NO NO NO NO.. DON’T DO IT!
Ok, I’m a financial advisor.. so here goes.
Your credit card company wont tell you this, but if you are late.. even a day over, they can punch your rate up to 30% or whatever they want. Also, say you pay it on time and they simply “don’t get it” hello 30%. No excuses. You pay.
Now you don’t want to get stuck with a 30-100k bill at 30%. Now that this horrrible administration has taken out the personal joe’s ability to declare bankruptcy and that credit cards are changing minimum payment laws so that minimum payments will be much higher.. I advise you to stear clear of this. Hope that when you get done you can get into a program (they are out there) that will allow you to drop your interest rate by 1% after 24 months of ontime payments and another .25% if you make it auto pay…
Look, some of the lowest rates you’ll see should be on student loan rates. When I went rates were at 8%. That’s not so bad..
The only reason I’d say to pay it off is if you can secure it to a lower secured credit line like a home equity loan (if rates dump again). But since student loans are federally guaranteed, you should be able to defer or forbear most if you decide to go back to school later, or get that degree you thought you wouldn’t need. If you switch this principle amount out of a guarenteed ‘student’ loan, that money is no longer eligible for a forbearance or deferance.
Good question…
Hey here’s a thought though… if you ever plan on having a home of your own.. get a credit card, but KEEP YOUR PRINCIPLE DOWN BELOW 30%.. in other words, if your limit is 1000 bucks, never use more than $330. Why? Because the credit agencies will see you as being desperate for money and will drop your score if you use more than that. Keep in mind that you want to build up your score now so that when you want a good credit card, or low mortgage rate on a home.
Good luck!!
Jason
Sure you can, as long as you are disciplined. I transfered mine to 2.9 fom 7.9. The advisor there panicing is correct but if you have the discipline to not be late then you are ok.
Dont use that credit card, they always pay the lower debt first letting the higher rate accumalate.
Make sure the 0% is not just intro but for the length of the loan. You usually can negotiate on cards with 0 balance if you call them.
MAKRE SURE YOU HAVE A 0 BALANCE ON THE CARD AND DONT USE IT< TREAT IT LIKE A SIGNATURE LOAN
Everyone is correct here, especially the worries of the Advisor. If you’re transferring to a card that already includes a balance, this is a very bad idea. They will hold the transferred balance and require you to pay the balances “in order of appearance” meaning that all your payments will be applied to the transferred balance ONLY WHEN your higher interest current balances are paid in full. Transferred balances are almost always held until last.
You’d be balancing on a fine line. You’d lose all tax benefits on your student loan interest. You’d be praying you could pay it off without losing your job, having an emergency of ANY kind, and putting a massive hit on your credit score. A part of your credit score is based on credit extended to you vs. how much you’ve used. For example, you have $5K in loans and a new $5K credit card with 0% bal. transfer. You appear to have 5K in credit with 0% used. Great! Then you pay off the loan with the card. Now you show to have 5K in credit with 100% used. Loan companies might notice that you used the card to pay off the loan, but your score will still show a heavy user. Card companies will frown a bit because they will label you as a transferrer and not a user. They will gladly accept the 5K transfer, but that is not the reason they gave you the card. In the future, if you beging to transfer balance from card to card, companies will turn you down because they will not see you as a profitable customer. They might not tell it to you in those exact words, but they can do that.