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Should I put my student loans in forbearance to pay off credit card debt?

Filed Under Personal Finance 

everyday262003 asked:


I have $40,000 in credit card debt. I can put my student loans in forbearance for 3 years. Should I do this to pay off my credit card debt?

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Comments

4 Responses to “Should I put my student loans in forbearance to pay off credit card debt?”

  1. Kansieo.com on January 5th, 2009 12:01 am

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    pay off the credit card debt. DEFO

  2. Caffeinated Content on January 5th, 2009 3:08 pm

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    The credit cards probably have a higher interest rate. You should try to pay off the highest interest debt first.

  3. Kansieo.com on January 7th, 2009 3:50 pm

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    If you stop making payments on your student loans, the compound interest starts to pile up very quickly. But then I’m sure that the 19% interest on your credit card debt is eating you alive…
    If you can put off student loan payments and not take a credit hit, do it. But meanwhile *pay off* that CC debt!! Don’t dawdle about it. Three years is enough time to pay down that much if you really tighten up. Showing up at the end of three years with $25K still outstanding on cards is likely to inspire your student debt holders to be very cranky.

  4. Create a video blog on January 11th, 2009 1:02 am

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    It really depends on how much you earn and what will happen at the end of the three years. If you make less than $50,000, you are effectively close to bankrupt. If the credit card debt happened because you don’t make enough to cover your monthly expenses, and there is no way that is going to improve substantially, then I would look into bankruptcy on the credit cards and pay on your student loans instead. It will ruin your credit report, but might be a way to start over.

    On the other hand, if you can afford to pay the credit cards, especially within 3 years (it will cost you about $1,300 a month to pay them off in three years), then yes, get forbearance and pay the suckers off as fast as you can.

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