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question- student loans


Forum: Financial Planning and Budgeting

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  #1  
April 17th, 2010, 07:40 PM
mayandsofiasmommy's Avatar Platinum Supermommy
Join Date: Aug 2007
Location: CA
Posts: 12,545
I have 1 credit card that I am currently paying the minimum on, and I have student loans. cc has more on it than the student loans. Do I pay the student loans off first? Or focus on the cc?
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  #2  
April 18th, 2010, 02:05 PM
Lynsann's Avatar Platinum Supermommy
Join Date: Oct 2005
Posts: 8,867
I'm assuming the credit card has a higher interest rate, so pay the minimum on the student loan and apply everything extra to the card. Once the card is paid off, take everything you've been paying on the credit card and put it towards the student loan. That's how it works rollover debt payoff. I haven't had any student loans though so I don't know if there are different rules for them.
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  #3  
April 18th, 2010, 07:23 PM
Mega Super Mommy
Join Date: Jan 2007
Location: Portland, OR
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CC. As far as I know, cc's are more "toxic" debt than student loans
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  #4  
April 19th, 2010, 09:06 AM
Mega Super Mommy
Join Date: Aug 2005
Location: Texas
Posts: 4,649
I would pay the minimums on both, then put your extra towards the credit cards. I'm sure the cc have a much higher interest rate!

However - Dave Ramsey says to pay off the smallest debt first. Then when that is paid off, you take all of that money and put it towards the next debt. His theory is people are most successful when they actually get some things paid off and it motivates them to keep working to pay off everything. (in a nutshell.... there is more to it than that) How much in student loans do you have? If it's relatively small and you can pay it off quickly, then you would have only have 1 payment to make per month.
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  #5  
April 21st, 2010, 12:50 PM
mommy2Breana+Brandon's Avatar Platinum Supermommy
Join Date: Dec 2006
Location: PA
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I would work on the credit card first as well.
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  #6  
April 21st, 2010, 03:43 PM
sugarloafbaby's Avatar Mega Super Mommy
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Location: Ohio
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I agree with Jenninator- I would pay off the student loan first. You can always settle with a credit card company if necessary, but you can't do that with student loans.
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  #7  
May 23rd, 2010, 06:23 PM
Mega Super Mommy
Join Date: Mar 2010
Location: Ohio
Posts: 1,032
I would pay the student loans off first because there are more consequences when it comes to them than with credit cards. They can garnish your wages and take your taxes. My BF just lost out on a $3,000 tax refund because of student loans in default.

Also, like it was mentioned before, you can settle with credit card companies.
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