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Should you use extra student loan money to pay off credit cards?
Wiki User
∙ 15y ago
== == Suggestions below may be helpful(financially), but they are advising you to commit fraud. I have yet to read an education loan agreement (including private/alternative loans) that does not stipulate that the proceeds of the loan are for educational use only. For federal student loans, signing the promissory notes to obtain (or later consolidate) loans used to payoff credit cards may also be a separate (and federal) perjury offense. Having said that, here are the opinions:
I would suggest that you definitely utilize the money offered to you at a lower interest rate to pay off higher rate credit cards. Given that the average credit card carries an APR of 15% and the average student loan is 5% or less makes it to your advantage to get the 15% debt off your back. The only hampering factor you should consider is this: Is 5% of your total student loan annually going to cost you more than 15% of your total credit card debt? If not, than I would do it. More input from FAQ Farmers: Yes. It doesn't matter whether 5% of your total student loan is more than the 15% of credit card debt. Either way, debt is debt and it all adds up to the same amount. The only key factor is interest and loans are definitely cheaper. The key to this being helpful is that you must keep paying down your credit card debt as you would have if you were making payments to the cc company. If you can't do this, then just keep your credit card because you'll end up leaving the credit card debt on the loan for so long that it will not turn out cheaper. You can do this but i don't think it will be a good idea. To pay off your bill you should not put more burden on yourself.
You cannot pay your credit card bills with government approved loans, however if you have taken loan from private vendor then you can spend your loan amount on other expenses.
Wiki User
∙ 15y ago
Wiki User
∙ 8y agoYou can't. A student loan is for educational purposes only.
Yes you can! Go to (a private loan website) for a private loan! You can get the money you need for other college expenses. And non-college expenses! And completely fraudulent purposes!
Wiki User
∙ 18y agoYes you can use your student loans to pay off other debts...but beware of doing that. There are positives and negatives. Think of financial aid loans as a big pond of money dedicated to your needs. One negative, is when the pond goes dry, that's it. No more loan money. It's much better in the long run to be a college grad than to have no credit card debt. Also, you have to know for sure that the ammount you are being awarded will cover your college expenses, much less other bills. The amount you are given deals with grade in school and your EFC, or expected family contribution, which if you are under the age of 22, (unless you are married, a ward of the state, or otherwise emancipated) is based on your parents' income. If your folks are loaded (or your husband, or even you) you wont get squat. Confirm your loan amount first and use that extra money sparingly after you have paid everything off FOR SCHOOL. One positive, is that student interest rates on loans are currently much lower than credit cards and bank loans.
Wiki User
∙ 16y agoNo. Student loans must be administered by the college bursur and distrubuted according to the lenders instructions.
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