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Student Loan Question

498 views 6 replies 7 participants last post by  cristeen 
#1 ·
Freespirted's thread reminded me. (thanks A LOT, free spirted
)

DH and I have a lot of loans. Our federal loans are locked in at a low rate and my alternative loans don't totally suck (8%?) but I usually have to pretend they don't exist. The one that gets me is DH's loan with Sallie Mae. I hate hate hate Sallie Mae.
The loan is on deferment. Some error on their part has it that way even though DH isn't in school. The interest has wavered between 10% and 12.5%!!! It started out as 10K and is now almost 17K. We need to dump it.

I could pay it off in a year or so, but I would rather build up a large saving account / put some money into our house.
:
I could put it on our credit card, which has an 8.9% rate and enough open credit. I could also try to find a card with a lower rate.
I could see if DH could take out a personal loan to pay it. He has excellent credit (790)but noo income (SAHD). What are the rates like on these?

Even if I pay it off in a year, I would want to move it for the meantime so that it isn't accruing as much interest.

What would you suggest?
 
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#2 ·
I would move it to a low interest card or a loan and then pay it off fast. Then you can put those payments into your savings account, when you are done. Or you could take 18-24 months to pay it off, and put the rest of the $ into saving. If you don't have any savings, I highly recomend doing it this way.
 
#3 ·
I agree to move it. I have heard horror stories about Sallie Mae. People complain about how shady the cc companies are, but I think Sallie Mae is worse to deal with.

(ok, this opinion is just from what I've read/been told. I don't have a sl with them).
 
#4 ·
I would pay it off as quickly as you can, assuming you already have an emergency fund somewhere. Even if you move it to another card or take out another loan, the longer you drag it out, the more they get from you in interest and then you end up paying twice as much as the loan is actually for.
 
#6 ·
Here is what I did...

I refinanced my house at 5% (a few years ago) and paid off all the student loans. The loans were at 8% over 30 years. The new mortgage was at 5% over 15 years. My payments actually still went down because of the much better interest rate, and the debt will be paid off twice as fast.

I'd pay off or transfer that high interest loan to anything lower and pay all of them off as quickly as possible.
 
#7 ·
Well, first of all I would get it out of deferment, that's why it's increasing.

I would not put it on a credit card for one basic reason. Federal student loan interest is deductible. Credit card interest is not. I *would* get it paid off ASAP though, and maybe even call them and see about getting the rate lowered... that's a REALLY high rate to have on a federal loan.

But, if it's not a federal loan, then disregard the above and do what you have to to get the interest rate lowered and then get it paid off.
 
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