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Further
Reading ...
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Make Them an Offer They Can't Refuse! - Denise Hall
Every netrepreneur knows that the most important aspect of building a business is responsive leads. Whether you publish an ezine or just send occasional sales letters via e-mail, if you don't get a good response, you won't have a profitable...
How to go forward and not backwards with your business. - Robin Araoz
When I was little and learning to walk, I had a problem... I couldn´t crawl forward, instead I did it backward. My parents told me that every time I tried to do it right, it went wrong! But, that was a long time ago, and, as you can imagine, I...
How To Come Up With New Product Ideas - Jeff Schuman
Have you ever wanted to add new products to your exsisting product line? Obviously one way to do that is to find a product that is already developed and start selling that. Affiliate programs are great for that. Another thing you can do is...
Do your customers waste your time? - Richard Grady
I saw a post on a marketing forum a few weeks ago and it was from a chap that had purchased a piece of software from a well known Internet marketer. After purchasing the product, the buyer had sent several emails to the seller with questions about...
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How to Get Rid of Pesky High Interest Student Loans
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Written By:
Jona E. Kessans & Terry Rigg
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Currently student loans are at an all time low interest rate, which is a great deal for those currently attending college. But, if you’re like me and attended college in the nineties or in the eighties then you know that there was no such thing as a low interest rate. The best you could hope for was around 8.25% and usually 9 or 10%.
By today’s standards, this is outrageously high and loans with interest rates this high are darn near impossible to pay off in a decent amount of time. Moreover, by the time all of the interest is paid it almost doubles the loan amount. I guess you could say this is the magic of compounding in action. And unlike traditional loans that can be financed at a lower rate, student loans don’t have this option available. So, most people just trudge along and continue to pay year after year after year.
However, after some research and creative financing I have come up with a viable way to get around high interest rates thus shortening the time it takes to pay off old loans and pay less in overall interest.
Basically, I contend that one of the best ways to eliminate student loans quicker and at a much lower interest rate is to transfer the old loan onto a credit card that offers a low to no interest rate on balance transfers. To verify this I asked my friend Terry Rigg, owner of The Budget Stretcher (http://www.homemoneyhelp.com) to do the comparison calculations.
Here’s a comparative analysis he did. A student loan in the amount of $15,000 at 9% with a payment of $300 per month would take 5 years 3 months to pay off with a total interest amount of $3,870.56 in interest.
However, by transferring this same $15,000 to a low interest credit card with an interest rate of 3.9% for the life of the balance transfer, it will only take 4 years 7 months to pay off making the same $300 per month payments. The total interest paid would be $1,337.90: a total savings of $2,532.66 with a pay off eight months sooner.
This method isn’t for everyone, but it is a viable option for those who wish to unload old high-interest student loans once and for all. And, obviously, good credit is a necessity to obtain low balance transfer rates. However, before making the decision to use this - continued below ...
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continued ...
method, it’s wise to go over the pros and cons of each method.
The Pros and Cons of Keeping High Interest Student Loans
Pros:
·Student loans can be put into deferment/forbearance if you should ever experience economic hardship.
·Interest on student loans can be used as a tax write-off for a certain number of years.
·In certain very rare cases, student loans can be forgiven.
Cons:
·Student loans continue to accrue interest while in deferment/forbearance.
·Interest on student loans transferred to a credit card is not eligible for a tax write-off.
·It is next to impossible to have student loans forgiven.
The Pros and Cons of Transferring Student Loans onto a Low Interest Credit Card
Pros:
·Faster pay off time and less interest paid.
·Bankruptcy can be filed on credit cards if you experience economic hardship.
Cons:
·Credit Card amounts can’t be put into deferment/forbearance.
·Miss a payment or be late making a payment means loosing a low interest rate.
Obviously there are pros and cons for both sides. Most important, however, is your level of tolerance where debt is concerned. For many people, a seemingly never ending cycle of payment after payment made to high interest student loans with the majority of each payment going toward interest is a huge burden.
I don’t recommend this as an option for people already on the precipice of economic failure, but rather for people just looking for an alternative way to eliminate old student loans quicker and cheaper.
Each person should weigh their situation carefully before deciding to take this or any other route where student loans are concerned. For me, this presented an excellent option to finally rid myself of an old pesky student loan once and for all.
About the Author
Jona Kessans is the editor of Simple & Frugal News and the Simple & Frugal website http://www.simpleandfrugal.com: a website dedicated to providing information to those on the journey to simplifying their lives.
Terry Rigg is editor of The FREE Budget Stretcher Newsletter and Budget Stretcher web site http://www.homemoneyhelp.com.
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| _Additional Resources ... |
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10 Best Ways to Justify Your Airplane Purchase - Pat Redmond
For those of us who've caught the "aviation bug" finding a way to justify the purchase of an airplane becomes an all consuming mental task. Make this task simple by choosing the appropriate reasons from the list below: 1. The airplane will make...
Pricing Your Products - Marc Singer
In our scramble to find a way to offer the lowest prices on the Internet, we often overlook the basic steps that we should be taking BEFORE we even offer a product for sale. We also overlook something even more important: you don't HAVE to have...
Structure + Boundaries = Freedom - Joanne Victoria
Article Title: Structure + Boundaries = Freedom Author Name: Joanne Victoria Contact E-mail Address: joanne@joannevictoria.com Word Count: 630, including signature box Category: Personal Development Copyright Date: 2002-2004 ~~~~~~~~~~~~~~~...
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