In 2016 I had a private loan in the amount $3,310 at 10.49% Interest (9.775% APR). My wife had a private loan for $6000 from Sallie Mae for 8.875% interest and one for $9337 at 10.49% interest (9.93% APR).
On $13k, over 12 months it would have accrued $1363 in interest at 10.49%.
For sallie mae it is $291.50 for a year.
Holy shit, that’s $1655 worth of interest over 12 months. That is $4.53 in interest PER DAY! I had just started a job making $55,000 annually, and we knew we could pay off the full balances in 12 months. We had a combined $30k in credit card limits, so we paid the 3% balance transfer fee for 12 months of 0% interest (which we thought of as a 3% APR loan for 12 months). My Bank of America card only had a 2% balance transfer fee.
The fee for $16400 was $156 (boa 7.8k) and $258 (citi and cap1 8.6k) total $414. $1655 - $414 =
$1241.
Then if you can put the money that WOULD go towards the $16k of transferred student loans into an Ally 1% savings account, you save even more. We have the funds to pay off the credit cards, but make the minimum payments until the promotional APR expires in May.
So yes, it's super easy to Balance Transfer your student loans onto a credit card, but I would only recommend it if:
- Your student loan APR is >10%
- You 100% know you can pay off the cards before the 0% promo ends
- If you are planning on buying a house in 12 months, don't do it. Your credit score (FICO) will temporarily go down ~100 points since your utilization will go wayyy up.
Any questions?