HELP please! I am burried in debt - about $41,000 in total to be exact The breakdown is as follows: 14,000 - car loan (1 loan) 19,000 - student loan (4 seperate loans- 3 are from years ago, 1 small recent) 9,000 - credit card (7 different cards) I am ultimately trying to buy my first house within the next 6-9 months - so qualifying for a mortgage and oaying off my debt with the lowest interest rates possible is my goal. My question: I just started going back to school again and took out a small student loan to pay for my classes. I have been told that it might be in my best interest to take out a private student loan and pay off all of my 9,000 in credit card debt with that. Benefits being, this would be a lower interest rate than a credit card or personal loan. I have a longer time to pay it off (however, I will begin making the payments immediately to lessen the time) and apparently student loans are not looked at too negatively when applying for mortgages??? Can someone PLEASE tell me if what I have been told is true. Of what I know about credit - it seems to make sense to me. Even though I am in 40K in debt - all of my accounts are current. My credit scores average about 575 right now and I could have my grandmother as co-signer with great credit if needed. Thank you all so much for your anticipated help!!
Taking out a loan that has a lengthy repayment plan (private student loan) but lower interest rate than those credit cards probably wouldn't be to your benefit. And don't forget that there are loan origination fees and capitalized interest. All these extra fees could possibly add up to more than the current interest rates on your credit card debt. Ideally private student loans are to be used for "educational expenses". I don't know if prior credit card debt falls into that category. And you wouldn't be able to get the tax write off on interest paid unless you are using the funds for educational expenses. If you're getting any "need based aid" for your education, taking on a private student loan that exceeds the cost of attendance at your college will reduce your aid because you will be considered to have extra resources $$. It sounds like you're setting yourself up for a never ending cycle of "Borrowing from Peter to pay Paul". I've read through your previous posts and noticed that you've had plans on buying a house for the last 2.5 yrs? And now you have nine grand in c.c debt on seven different cards. Something just isn't right with this equation. You need to do some homework on managing personal finances and private student loans. I really don't think a private student loan is going to solve your problem. And with a credit score under 650 your chances are slim to none. But it's really nice of your grandmother to be willing to sign for a loan because you got yourself in over your head in credit card debt. Good Luck!
