I keep thinking about this balance transfer offer and I think I might actually take it. My Sallie Mae loan (non-federal loan so it doesn't matter for taxes) is my highest interest rate right now at 13.25%. The balance is a little under $2,200. Right now I pay $60/mo on it.
Extra money I could put towards paying it off by Jan 1, 2008:
$118 extra in budget to be used for whatever I'm focusing on paying off.
$100 from step brother, it's an allotment so it's auto deposited every month.
$180 from childcare I provide.
$60 from the payment I was making before.
Over the course of 6 months, all of that equals more than I would be borrowing so I could potentially pay it off on time. My variable rate on the credit card is 14.24% right now so if there was any leftover that's the rate it would be charged at.
Not to mention any extra on call money I might get plus the change in my withholdings will make a difference I just don't know by how much yet. Plus when it gets down to the end, I could probably just pull from savings what needed to be paid off before interest accrued.
I'm seriously thinking about this. I think I might sleep on it first. I have until July 28th to accept the offer.
0% Balance Transfer and No Fee take 2
June 25th, 2007 at 07:19 pm
June 25th, 2007 at 07:31 pm 1182799891
June 25th, 2007 at 07:37 pm 1182800244
June 25th, 2007 at 09:41 pm 1182807661
Consider two choices; transferring the balance to a credit card, then paying it off by January 2008, or just paying off the existing loan by January 2008.
$2200 at 13.25% is about $300 per year, or $150 per 6 months. But if you're paying off the loan, the average term will be closer to half that. So somewhere around $75 in interest. Perhaps you can deduct that interest on your taxes? I'm not sure, but if so it may be a little less than $75.
Of course if you transfer it to a 0% credit card, you'll pay no interest.
So is $75 (maybe less) worth taking out a new line of credit and impacting your credit score? It wouldn't be to me.
June 25th, 2007 at 09:47 pm 1182808076
June 25th, 2007 at 11:02 pm 1182812568
You do make a good point about if I were to just apply all that money to it now anyway. Besides, I think a better option has surfaced (ie an outstanding loan made by me to my brother may be paid off in full within the next month) so I am just going to wait and ignore the balance transfer for now.
June 26th, 2007 at 03:13 pm 1182870784