Private Loan Pain...

[MexicanDr]

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Hello-

I currently have a private loan that needs to be paid and its in a way holding me from going to school full time as I need a steady job to do the payments.

Will it be smart to get one or two Stafford loans from school and use most of that money to do a huge payment on this private loan? Maybe use the Stafford loan money to pay 1-2 years ahead of the private loan monthly payments that way I can focus and take more classes?

Or should I just keep the full time job, take less classes and not get a Stafford loan from school?

Thanks guys,

Ed

 

[dotdash]

Hard to say without more details. You haven't said what the interest rates are, which might affect your decision. Also whether the private debt is student debt tied to you forever, or a car loan or something, which can be discharged if you ever face bankruptcy. If your financial situation is precarious, trading dischargable debt for non-dischargable debt might not be a good idea.

What are the relative loan amounts? Would the Stafford loan(s) pay off the other loan (which maybe seems like a reasonable thing to do) or just help you make payments for a while (you just add another debt)? Someone here who knows more about the Stafford loans can maybe say whether there is a downside to taking them out -- is there a limit, so you may be causing yourself more trouble down the line? Do they contribute to a debt ceiling figure somewhere down the line? (Not sure where you are in school and whether you might need more loans in the future)