Home Awesome Can You Pay Your Student Loans With a Credit Card?

Can You Pay Your Student Loans With a Credit Card?

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As a student loan borrower, you’ve probably felt the pinch of those monthly payments and wondered if there’s a better style to deal with your education debt. Maybe you’ve even pondered whether you can pay student loans with a credit card.

Well, can you really pay student debt with a charge card? In fact, the answer depends on factors like who services your loans and what kind of card you have. Read on to learn more about pay student loans with a credit card, plus — more importantly — what to consider before you go down that route.

Can you pay student loans with a credit card?

While making payments toward your student loans use a charge card might seem like a great idea, the truth is that many federal loan servicers and private lenders don’t offer this option.

I remember when I got my first rewards charge card and thought it would be a brilliant idea to use it for my hefty loan pays — I dreamed about racking up airline miles.

But alas, federal loan servicer Nelnet does not allow borrowers to pay student loans with a credit card. I was bummed, to say the least, as I thought I might be able to score a free flight or money back while paying off my massive student debt.

Loan servicers like Nelnet, MOHELA, Great Lakes and FedLoan Servicing require borrowers to pay through their checking or savings account.

Private student loan borrowers might be able to pay student loans with a credit card, but they could have to fork over a fee to do so. College Ave Student Loans, for example, permits borrowers to make a one-time payment online using a credit card.

That’s where Plastiq comes in. It claims to be the only company to allow you to use a credit where it’s not typically accepted — in exchange for a 2.5% fee. If you made a student loan payment of $393, for example, you’d have to pay Plastiq a commission of almost $10, feeing into( and perhaps erasing) your card’s potential rewards.

Another thing to note: Plastiq merely allows you to use Visa, Mastercard and Discover for student loan pays — so American Express customers are out of luck.

Why you might not want to pay student loans with a charge card

Keep in mind that only because you can pay your student loans with a credit card doesn’t mean you should. It’s crucial to consider fees that may be tacked on if you pay with a charge card, whether they’re charged by your lender or a third-party provider like Plastiq.

Consider some of these other reasons not to pay student loans with a charge card 😛 TAGEND Interest rates

Federal student loan interest rates are typically between around 5-8 %, whereas credit card interest rates often surpass 15.00%.

Even if you wanted to use an introductory 0% APR on a balance transfer credit card offer to save money on interest, that rate was able to be available for a limited time. Once the promotion is up, the interest rate could easily be doubled the rate on your student loan or more.

And the worst part: Because your student loan pay already includes interest charges for the month, carrying a balance on your credit card and paying interest on it means you are paying interest on interest!

Finally, if you pay student loans with a charge card, you won’t be able to enroll in autopay with your lender and score the industry-standard 0.25% rate reduction.

Credit score

The amount of indebtednes you owe in relation to available credit constructs up 30% of your FICO credit score. This number is also known as your credit utilization ratio.

Even if you pay off your credit cards in full each month, your credit could be at risk if your ratio is high at the time they’re reviewed each month.

That’s because use all of your available credit is seen as a red flag to lenders. Typically, experts recommend use less than 30% of your credit limit. So if you have a $ 10,000 credit limit, it’s best to keep your balances below $3,000.

Credit dependency

Another thing to consider is that you once you attain student loan pays with your credit card, you might create a routine that isn’t sustainable.

If you’re struggling to keep up with your student loans, you can typically be granted deferment or patience. However, using a charge card instead means that if you make troubled periods, you could be in debt on both your credit card and student loans.

Alternative available

One more reason you might not want to turn to credit cards for your school debt is that there are many other options that might be a lot easier on your finances, especially if you have federal loans.

Here are some other loan-management strategies to explore 😛 TAGEND

Student loan forgiveness: Investigate your eligibility for federal, state and employer-offered repayment assistance programs that could wipe away part or all of your indebtednes. Income-driven refund: You could decrease your monthly pays on federal loans by switching to an income-driven plan. And if you’re struggling with your private loans, ask your lender if you could adjust your repayment plan or perhaps defer pays use a kind of patience. Student loan refinancing: You could reduce your monthly dues on federal and private loans by consolidating them together with a bank, credit union or online lender. Just be sure you won’t miss those federal loan protections that will be lost when you refinance.

Should you pay student loans with a charge card?

If you’re still considering paying student loans with a credit card, first make sure you can answer yes to both of these questions 😛 TAGEND

Do your credit card’s rewards outweigh the fees of your lender( and third-party payment provider ), plus the loss of an autopay rate reduction? Can you easily zero out both your loan and card balance each month?

You also have to be willing to pull the plug on using your card as soon as it becomes apparent that you don’t have enough cash in your bank account to completely pay off your monthly card balance. At that phase, you’d want to review your other options to postpone or lower your loan loan payments.

Sometimes it’s better to be safe than sorry: Paying via your checking account will keep your student loan repayment on track and stop credit abuse before it occurs.

Andrew Pentis contributed to this report.

Interested in refinancing student loans? Here are the top 6 lenders of 2019!

LenderVariable APREligible Degrees

Check out the testimonials and our in-depth reviews! 1 Important Disclosures for SoFi. SoFi Disclosures Student loan Refinance: Fixed rates from 3.690% APR to 8.074% APR( with AutoPay ). Variable rates from 2.430% APR to 6.650% APR( with AutoPay ). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR instances and terms. Lowest variable rate of 2.430% APR presumes current 1 month LIBOR rate of 2.43% plus 0.04% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered is dependent on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates stated above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans is rising after origination if the LIBOR index increases. See eligibility details. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to attain monthly principal and interest pays by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.* To check the rates and words you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit investigations, soft credit investigations( or soft credit pullings) do not impact your credit rating. Soft credit inquiries permit SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting bureaux, which is considered a hard credit investigation. Hard credit investigations( or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Term and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To is eligible for the lowest rate, you must have a responsible fiscal history and gratify other conditions. If approved, your actual rate will be within the range of rates stated above and will depend on a variety of factors, including word of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment alternatives that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp ., NMLS# 1121636.( www.nmlsconsumeraccess.org)

2 Important Disclosures for Earnest. Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10 -year( non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and fulfill our minimum eligibility criteria. You may find more information on loan eligibility here: https :// www.earnest.com/ eligibility. Not all applicants will be approved for a loan, and not all applicants will is eligible for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.50% APR( with Auto Pay) to 7.89% APR( with Auto Pay ). Variable rate loan rates range from 2.49% APR( with Auto Pay) to 7.27% APR( with Auto Pay ). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never outstrip 8.95% for loan terms 10 years or less. For loan words of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan words over 15 years, the interest rate will never outstrip 11.95%( the maximum rates for these loans ). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate( LIBOR ). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate scopes are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you construct monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one one-quarter of one percent( 0.25%) for so long as you continue to make automatic, electronic monthly pays. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 04/17/ 2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operation LLC. California Finance Lender License 6054788. NMLS# 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401 N, San Francisco, CA 94107. Words and Conditions apply. Visit https :// www.earnest.com/ terms-of-service, email us at hello @earnest. com, or call 888 -6 01 -2 801 for more information on our student loan refinance product.

( c) 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United State of America.

3 Important Disclosures for Laurel Road. Laurel Road Disclosures

FIXED APR Fixed rate options consist of a scope from 3.50% per year to 5.55% per year for a 5-year term, 4.00% per year to 6.00% per year for a 7-year term, 4.30% per year to 6.40% per year for a 10 -year term, 4.60% per year to 6.80% per year for a 15 -year term, or 5.05% per year to 7.02% per year for a 20 -year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full( whether before or after default, and whether before or after the scheduled maturity date of the loan ). The monthly pay for a sample $10,000 loan at a range of 3.50% per year to 5.55% per year for a 5-year term would be from $ 184.00 to $193.00. The monthly payment for a sample $10,000 loan at a range of 4.00% per year to 6.00% per year for a 7-year term would be from $ 138 to $148. The monthly payment for a sample $10,000 loan at a range of 4.30% per year to 6.40% per year for a 10 -year term would be from $104 to $115. The monthly pay for a sample $10,000 loan at a range of 4.60% per year to 6.80% per year for a 15 -year term would be from $79 to $91. The monthly payment for a sample $10,000 loan at a range of 5.05% per year to 7.02% per year for a 20 -year term would be from $68 to $80.

However, if the borrower chooses to induce monthly payments automatically by electronic funds transfer( EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making( or we stop accepting) monthly pays automatically by EFT from the designated borrower’s bank account.

VARIABLE APR Variable rate options consist of a range from 2.43% per year to 6.05% per year for a 5-year term, 3.75% per year to 6.10% per year for a 7-year term, 4.00% per year to 6.15% per year for a 10 -year term, 4.25% per year to 6.40% per year for a 15 -year term, or 4.50% per year to 6.65% per year for a 20 -year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month( “Change Date”) if the Current Index alterations. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate( LIBOR)( currency in US dollars ), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate( APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.25% to 3.80% for the 5-year term loan, 1.50% to 3.85% for the 7-year term loan, 1.75% to 3.90% for the 10 -year term loan, 2.00% to 4.15% for the 15 -year term loan, and 2.25% to 4.40% for the 20 -year term loan, respectively, to the 1-month LIBOR index published on the 25 th day of each month immediately preceding each “Change Date, ” as defined above, rounded to two decimal places, with no origination fees. If the 25 th day of the month is not a business day or is a US federal vacation, the reference date will be the most recent date preceding the 25 th day of the month that is a business day. The monthly pay for a sample $10,000 loan at a range of 2.43% per year to 6.05% per year for a 5-year term would be from $ 179 to $195. The monthly pay for a sample $10,000 loan at a range of 3.75% per year to 6.10% per year for a 7-year term would be from $ 137 to $148. The monthly payment for a sample $10,000 loan at a range of 4.00% per year to 6.15% per year for a 10 -year term would be from $103 to $114. The monthly payment for a sample $10,000 loan at a range of 4.25% per year to 6.40% per year for a 15 -year term would be from $77 to $88. The monthly pay for a sample $10,000 loan at a range of 4.50% per year to 6.65% per year for a 20 -year term would be from $65 to $77.

However, if the borrower chooses to attain monthly payments automatically by electronic monies transfer( EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops stimulating( or we stop accepting) monthly pays automatically by EFT from the designated borrower’s bank account.

All credit products is submitted to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than$ 4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that assist simplify giving through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online giving products in all 50 U.S. states, Washington, D.C ., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.

4 Important Disclosures for LendKey. LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation class, including, but not restricted to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these quiz preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible country to qualify for a loan. Certain membership requirements( including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, words, and benefits offered on this website at any time without notice. LendKey Technology, Inc. is not affiliated with , nor does it endorse, any educational institution.

5 Important Disclosures for CommonBond. CommonBond Disclosures

Offered words are subject to change. Loan are offered by CommonBond Lending, LLC( NMLS# 1175900 ). If you are approved for a loan, the interest rate offered is dependent on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rate( APRs) displayed presume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.45% effective May 10, 2019.

6 Important Disclosures for Citizens Bank. Citizens Bank Disclosures Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (” LIBOR “) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of May 1, 2019, the one-month LIBOR rate is 2. 48%. Variable interest rates range from 2.93%- 9.67%( 2.93%- 9.67% APR) and will fluctuate over the word of the borrower’s loan with changes in the LIBOR rate, and will differ based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 3.89%- 9.99%( 3.89%- 9.99% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates indicate are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment word and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment alternatives or are concerned about a steady source of future income and would want to lower their pays at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those members with the benefits of the Education Refinance Loan. For enquiries about federal student loan benefits and federal loan consolidation, visit http :// studentaid.ed.gov /. We also have several resources available to help the borrower make a decision at hensbttp :// www.citizank.com/ EdRefinance, including Should I Refinance My Student Loans ? and our FAQs. Should I Refinance My Student Loans ? includes a comparing of federal and private student loan benefits that we encourage the borrower to review. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive pays of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident foreigner with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer( if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United Nation. For applicants who have not attained the age of majority in their state of mansion, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/ consumer credit agreement, verification of application information, certification of borrower’s student loan amount( s) and highest degree earned. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer( if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer( if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity credit line, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account alternatives are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such hour as payments are required to be made and our loan servicer is authorized to automatically deduct pays each month from any bank account the borrower designates. Discount is not available when pays are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more hours within any 12 -month period, the borrower will no longer be eligible for this discount. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as pays received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who employ deferment or patience will need to make 36 consecutive on-time pays after reentering refund to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower were not able to reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority were not able to qualify for co-signer release. Note: co-signer release is not available on the Student Loan for Mothers or Education Refinance Loan for Parents. Citizens Bank Education Refinance Loan and Education Refinance Loan for Parents Eligibility:: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree, or with no degree, must have made at least 12 qualifying payments after leaving school. Qualifying pays are the most recent on time and consecutive pays of principal and interest on the loans being refinanced. For the Citizens Bank Education Refinance Loan and Education Refinance Loan for Mothers, primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer( if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United Country. For applicants who have not reached the age of majority in their country of residence, a co-signer will be required and may not be eligible for co-signer release. Citizens Bank observes the right to modify or discontinue these benefits at any time. Both Education Refinance Loans and Education Refinance Loan for Parents are subject to credit qualification, finish of a loan application/ consumer credit agreement, verification of application information, certification of borrower’s student loan amount( s) and highest degree earned or affordability, as applicable. The minimum student loan refinance sum is $10,000. Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based refund options or are concerned about a steady source of future income. For more information about federal student loan benefits and federal loan consolidation, visit http :// studentaid.ed.gov /. Resources are available to help the borrower make a decision, including a comparing of federal and private student loan benefits, at https :// studentaid.ed.gov/ sa/ forms/ loans/ federal-vs-private.

2. 49%- 7.27% 1Undergrad& Graduate

Visit Earnest

2. 43%- 6.65% 3Undergrad& Graduate

Visit SoFi

2. 49%- 7.41% 4Undergrad& Graduate

Visit Lendkey

2. 43%- 6.65% 2Undergrad& Graduate

Visit Laurel Road

2. 46%- 7.08% 5Undergrad& Graduate

Visit CommonBond

2. 93%- 9.67% 6Undergrad& Graduate

Visit Citizens

Our squad at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process , nor do we attain credit or investment pertained decisions. The rates and words listed on our website are calculates and are subject to change at any time.

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