I'm trying to get my credit in order. I'm 22 and have a credit card with about $3,000 on it. In March, I will have it down to about $1,500 and I was wondering if it would be better to take out a Sallie Mae loan for that much and pay off the card and act more cautiously with it, or just hang out with the interest and pay it off slowly. [I would like quickly, but that won't happen.] I do not have a ridiculously amount in student loans out and will be graduating in May.
Any opinions would help. Thanks.
2007-12-14 06:20:29 · 5 answers · asked by Jess B 1 in Business & Finance ➔ Credit
Consolidating your debt is a good idea... however using a school loan to pay off non-school expenses would be fraud. If you get caught, my guess is "interest" would be the least of your worries!
2007-12-14 06:26:51 · answer #1 · answered by f*** Y!A 5 · 1⤊ 1⤋
It depends on the interest rate for both the loan and the credit card. If you can get a lower rate with the student loan than you have on your credit card, then go for the student loan. But then you must only use the credit card when you can pay the balance at the end of the month and pay the student loan off as quickly as possible.
2007-12-14 06:25:21 · answer #2 · answered by Jeanne R 7 · 1⤊ 0⤋
Hey, if you are able to pay half of it in 4 month, why would you take a loan? Your credit score will be only benefiting if you have less than 50% of credit limit in your balances. I am not sure that student loan may be advanced towards credit card debt. Anyhow, you may save some money if you pay off the student loan fast; but I wouldn't do it if I can manage interest and pay slowly. Probably paying off your existing loans will save you the same money plus time and hassles of applying for the new one.
2007-12-14 06:54:58 · answer #3 · answered by roginad 3 · 0⤊ 1⤋
The only way that would be a good idea is if you shred your credit card and place a credit freeze with all 3 credit reporting facilities. Taking a loan to pay off another loan is ludicrous when you still have the means to run the credit card debt back up. Only buying what you can pay for is the only way to get out of debt and stay that way.
2007-12-14 07:14:05 · answer #4 · answered by S D 5 · 0⤊ 1⤋
If you can get a student loan with a smaller interest rate than your credit card than I think that would be a good idea.
2007-12-17 03:01:38 · answer #5 · answered by Anonymous · 0⤊ 0⤋