Loans Available to Pay off Credit Cards?

[xxxnoahxxx]

I will be a 1L in the fall and have approx. 6.5k in credit card debt.  It was the result of paying for a lot myself in college as well as some vacations and enjoying life.  I have never been late on a payment, clean credit history, but have only been mkaing just above the minimum payments.  I was wondering if there is any way to take out a loan to pay off my credit card debt in full?  If not, is there any way to apply for an increase in loan amount to cover the monthly payment which total a few hundred dollars?  Any help is much appreciated.

[giraffe205]

You could get a personal loan to pay it off. I wouldn't recommend this (unless it is a lower interest rate than you CCs) since you have to make payments while you are in school.

Another option is to keep all of your receipts for the first month while you are in school. Appeal your financial aid award on the grounds that your monthly expenses, e.g., food, clothing, shelter, transportation, etc., are more than the school has allotted. Car payments and credit card payments are not considered necesities so they will only factor in stuff like auto insurance, books, cell phone (if no land line), etc. If they approve your appeal, they will increase your cost of attendance budget. Thus, you can seek more money from stafford loans or a private lender and will not have to pay it back while you are in school.

These are the only options that I'm aware of. I recommend making an appt w/ your school's financial aid office. They can go over w/ you what your options are and what are considered necesities for financial aid purposes.

[antigiraffe]

dont listen to giraffe's advice, rumor has it she slept w the dean for her grades, and her reputation on this site is horrible

[sdlaw]

if your credit is good try calling your cc company and ask for a lower interest rate. 

[xxxnoahxxx]

Thanks for the advice.


PS- How is your reputation at -90?

[giraffe205]

Thanks for the advice.


PS- How is your reputation at -90?

I have an online stalker that likes to hit the "defame" button as often as possible. Don't be jealous. If you post only law-related comments and put up a picture of yourself sitting down, maybe s/he will move on to you.

[jfbruin]

I will be a 1L in the fall and have approx. 6.5k in credit card debt.  It was the result of paying for a lot myself in college as well as some vacations and enjoying life.  I have never been late on a payment, clean credit history, but have only been mkaing just above the minimum payments.  I was wondering if there is any way to take out a loan to pay off my credit card debt in full?  If not, is there any way to apply for an increase in loan amount to cover the monthly payment which total a few hundred dollars?  Any help is much appreciated.

You can get a private loan to pay off your credit cards.  This is different from a personal loan, as mentioned by giraffe, and also different from a private loan that is part of your financial aid package.  Check out the BofA Education Maximizer.  I've gotten two of these over my law school career, and I used the first to pay off my CC's.

These loans are expensive so you'll have to crunch the numbers first to see if it makes sense.  There is always an origination fee (app. 8%) and then you have to pay a pretty high rate (LIBOR + 2 or Prime +.5 --> something like that).  It made sense for me because my cards were almost over the limit and my rates were super high.  Plus, my cards are at zero now and I can use them for emergency situations. 

Also, you may have to get a cosigner.  I got my first w/out a cosigner, but they made me get one for the second. 

Finally, there are other private loans out there, so shop around to find the best deal.  Be careful not to confuse these private student loans with those that go directly to your school and are part of financial aid.  You want the kind that comes directly to you.

Good luck.

[jfbruin]

Oh ya- payments are deferred until 6 months after you graduate.

[racheles05]

A personal consolidation loan isn't always a bad idea. You can often get a lower interest rate on a consolidation loan than what you're paying on your cards, and the total minimum amount due each month is usually lower. Like giraffe said, you'll be paying it back during school so you'll want to be really careful about the numbers and how they'll fit into your budget. I wouldn't totally rule out a personal consolidation loan, though. You should of course avoid those places that advertise debt consolidation loans and talk to your bank. Credit unions often have much better rates for personal loans, so you could look into that as well.

So, I would look at consolidation loans through my bank, then compare those with supplemental private education loans to see which is the best the deal. You might want to see if you have that repayment insurance stuff on any of your cards and if you can use that for loss of income due to starting school full time. I haven't seen any that cover voluntary unemployment of any type, but it doesn't hurt to look.

[jdmaxey]

Noah,

Try the rotating credit card game for a bit. So many cc companies send out offers for 0% interest for six months or longer for balance transfers. Doing this will allow you to make huge improvements on your balances. Good luck in the Fall.