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jvin2006

jvin2006
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Dec 19, 2006
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  1. Pre-Medical
What are the thoughts on obtaining a private loan to pay off $8000 in credit card bills? Is it better to keep making minimum payments until after residency, or would it be better to pay them off now and deal with the private loan when I'm making money?

I know it's not the ideal situation, but I'm a med student and have maxed out loans for this first year. Thanks in advance.
 

Twitch

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  1. Medical Student
What are the thoughts on obtaining a private loan to pay off $8000 in credit card bills? Is it better to keep making minimum payments until after residency, or would it be better to pay them off now and deal with the private loan when I'm making money?

I know it's not the ideal situation, but I'm a med student and have maxed out loans for this first year. Thanks in advance.

Depends on what rate the CC's are at. If they're milking you at $18%.

Here is what I would do:

Call your credit card co(s). Ask them to lower you interest rate. Yes, it's as easy as that. You don't need to provide any explanation ask them flat out. See if you can get them to come down to something more reasonable. I'd say < 6%. Obviously the lower the better. If they don't, tell them you've got some low Balance Transfer offers (you know the junk mail you get) and you're considering other offers as such. That's it, don't give any specifics. Wait for them to sweeten the deal. If they don't go down that much, it doesn't matter - take the offer this time around.

Next, try to see if you can get a 0% for 12 months deal or 3.9% for life. With the current fed rates being low this should be abundant, however, your credit score may hinder your ability to have access to them. What you're trying to do is get the rate as low as possible.

Now you have to cut down on spending as much as practically possible. Talk to your FA office to see if they can increase your FA award for next year. As soon as the federal funds come in, get rid of the credit card debt. It's really the worse type of debt to have, unless you're doing some creative AOR, or leveraging the sweet rewards w/o keeping a balance. :) Personally, there is very little spending I do that doesn't go on a credit card. However, I never purchase anything on CC unless I know I can pay it off completely at the end of the month.
 
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