Should you use extra student loan money to pay off credit cards?
== == 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.
