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Use Student Loan to pay off Car Loan?
Posted on 7/30/13 at 3:10 pm
Posted on 7/30/13 at 3:10 pm
My current interest rate on my car loan is just short of 9%. Would using a student loan to reduce the interest rate be a good idea?
The car loan is about $8,500 right now.
The car loan is about $8,500 right now.
4
Posted on 7/30/13 at 3:20 pm to LSUfan2008
quote:
Would using a student loan to reduce the interest rate be a good idea?
What is the student loan rate? Aren't the rates about to be tied to the fed rate?
Would you be able to afford paying $8500 of student loans to a car note? How would you pay for school?
Posted on 7/30/13 at 3:23 pm to Oenophile Brah
I'm on assistantship, which means my tuition is paid. I'm only responsible for ~$1,000 in fees per semester until Spring 2015.
Posted on 7/30/13 at 3:24 pm to Oenophile Brah
Student loan rate is 6.8%
This post was edited on 7/30/13 at 4:19 pm
Posted on 7/30/13 at 4:25 pm to LSUfan2008
could you not qualify for a used car loan at a credit union and do better?
Posted on 7/30/13 at 4:28 pm to Croacka
I'm not sure. Don't know if my income will qualify me for a better loan... While tuition is paid, I'm not really bringing in much per month.
Posted on 7/30/13 at 4:39 pm to LSUfan2008
quote:
Student loan rate is 6.8%
This is supposed to drop with the new law passed as it will be tied to the federal rate or economy, but I'm not sure what the formula is.
Posted on 7/30/13 at 6:50 pm to LSUfan2008
quote:
I'm not sure. Don't know if my income will qualify me for a better loan
Why don't you apply and find out? It generally doesn't cost anything.
To answer your original question, sure the student rate is lower. The flip side is that if something bad happens you cannot walk away from the loan. Student debt cannot be discharged by bankruptcy and Uncle Sam *will* get the money back whether you can afford it down the road or not.
I'm sure you aren't planning to default but it's something to be aware of.
Posted on 7/30/13 at 7:08 pm to foshizzle
Although a student loan is not secured by anything, which is a benefit. It's a ballsy move. But then I am still kicking myself for not taking out every penny I could in student loans back when they were 2.5%(!).
Posted on 7/30/13 at 9:25 pm to Cold Cous Cous
quote:
Although a student loan is not secured by anything, which is a benefit. It's a ballsy move. But then I am still kicking myself for not taking out every penny I could in student loans back when they were 2.5%(!).
True, but its one debt you have to pay off. Even if you file (something I hope nobody has to ever do).
Posted on 7/30/13 at 9:34 pm to LSUfan2008
Have you looked into traditional refinancing on the auto loan?
Posted on 7/30/13 at 9:51 pm to LSUfan2008
While actually illegal (assuming its not a private student loan) it makes sense from an interest rate standpoint
Posted on 7/31/13 at 12:31 am to Cold Cous Cous
quote:
Although a student loan is not secured by anything
It is secured by Uncle Sam's ability to garnish your paycheck throughout the fruited plain no matter what. Unless you're planning to disappear amongst the Taliban, you're paying.
Posted on 7/31/13 at 8:06 am to HurricaneDunc
Except that a student loan has a standard repayment of 10 years whereas he probably has a max of 5 with an auto loan. The monthly payments would be smaller but overall you're paying more for the car.
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