Using Student Loan Money to Pay off Credit Cards
A lot of college students tend to rack up credit card debt when they are going through school. This is a pretty common occurrence because most college students can't work much while they are also attending classes.If you find yourself in this position, you're going to be faced with some bills that need to be paid. One way that a lot of students tend to pay off their credit card bills is by using some of the money from their student loans.
If this is an idea that appeals to you, you need to make sure that you are aware of what you're doing and what the potential costs could be to you. Although it might seem like a great idea to get these credit card bills off of your back, it could end up being a bad financial move later on down the road. Before you use your student loan money to pay off anything, you need to sit back and do some research on what you're doing. You don't want to make the wrong financial move and end up losing money.
Do Your Research
A lot of times, students choose to pay off credit cards with student loan money because the interest rate on the student loans is much lower than the interest rate on the credit card. While this might appear like the wisest thing to do with your money, it may end up not being so. You must remember that your student loans must also be paid back, and if you are getting a loan where the government pays part of your interest now, this will not always be the case. Before you use funds this way, make sure that you think about how to repay your loans in the future.
You might also want to check and see if there are any guidelines that go with how you are to use the funds you receive through student loans. A lot of times, there are going to be rules and regulations in regards to how you can use the money that is given to you through loans. You may not actually be allowed to use them in this way, and you don't want to go around breaking any rules that could jeopardize your education and financial situation.
If everything checks out with the rules of your loan and you can find a way to pay back the student loans when they're going to be due, then it might not be a bad idea to use the student loan money to pay off credit cards. Before you simply use all of your money to pay off a loan, make sure that you contact your credit card company and ask about what amount they will accept as a payoff. You may be able to get away with paying just a portion of your credit card bill and not the entire thing.
Check with Financial Advisors
Using student loan money to pay off credit cards may be a wise thing, but you need to be sure of this before you make any moves. One thing that you might want to consider doing is talking to a student loan counselor or talking to a financial aid officer. Both of these individuals can probably help you out and give you the information that you need to make sure that you do the right thing. These qualified individuals help students with financial questions all of the time, so they are sure to have some sage advice.
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State Guides to Credit Card Laws
- North Carolina
- West Virginia