<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > 0% Balance Transfer and No Fee take 2
 

0% Balance Transfer and No Fee take 2

June 25th, 2007 at 07:19 pm

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.

6 Responses to “0% Balance Transfer and No Fee take 2”

  1. Broken Arrow Says:

    YIKES! 13.25% for student loans?!

  2. LdyFaile Says:

    Yup, I had outstanding loans from my prior degree and there's a max that you can have total outstanding for undergraduate studies so the last class I took I had to get a 'student' loan that actually looked at my credit history, etc. It started out at 12% and keeps fluctuating. Ugh.

  3. Anonymous Says:

    I'd look at it this way..

    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.

  4. Anonymous Says:

    Oh, and of course remember that it always winds up being a month or so before those balance transfers really take effect. And you'll ideally want to pay it off *before* January 2008. So adjust the numbers accordingly.

  5. LdyFaile Says:

    Yes but all the extra money that I can put towards it I can just hang onto until it actually gets applied (sans the $60 required payment that I make on the 20th if it's not in my hands by July 20) and pay whatever I've got on hand as soon as it shows up on my card.

    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.

  6. JW Thornhill Says:

    I would definitely consider "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." This is very good advice.

Leave a Reply

(Note: If you were logged in, we could automatically fill in these fields for you.)
*
Will not be published.
   

* Please spell out the number 9.  [ Why? ]

vB Code: You can use these tags: [b] [i] [u] [url] [email]