Private College Student Loan

Is it smart to increase my student loan amount to pay off my credit cards? Also, penalty 4 paying back extra?

I have a question. I'm approaching my school's deadline for paying my tuition, and I can't pay for it by myself. It's about 6K a semester, and I'm requesting about 10K in student loans to help me. I'm about to get a Wellsfargo Education Connection loan found here: http://wfefs.wellsfargo.com/jump/rates.html Questions: 1.) I was thinking, is it smart to increase my loan amount by 2K to pay off my credit cards with my extra loan amount (chase student cc 27.24% APR I think, wellsfargo student cc at 12.35% APR), so I don't have to worry about them any more? Or is there something I'm missing here? 2.) If I OVER-ESTIMATE my loan amount (Say I have 2K extra than I thought I would need), can't I just pay back the extra 2K, and still have the same rates as I would have if I had gotten a 10K loan instead of a 12K? Or would they penalize me? Since I don't know EXACTLY how much I need, it just seems smart to be safe. Or is it not smart to do that? 3.) Can I start paying back my loans immedietely? Like I do with credit cards, paying a little back while I'm in school? Any downside to this? Will this decrease the amount of time I have to pay it back? Thanks. Applying for the loan tonight if I get enough info. Last day to apply is tomorrow. Looking forward to the advice! To who asked about the loan rate, Not sure. Gave a link to wellsfargo on the rate of the loan. Not sure how to read it. Coutner-question to your answer. Would a 12K loan that I pay back 2K immediately (=10K the next day) have the same rate as a 10K loan? aka: do the rates matter on the initial loan amount or the amount of loan you have left?

Public Comments

1. Yes it probably is smart, as long as the student loans have a low rate of interest, and do not have to start being paid back 6 months after graduation.
2. Depends ?? whats the interest on the student loan? 6% - 10% ? vs. 27 and 12% I would leave a "very small" balance on the credit cards to keep them open but put them in a safe place where you won't use them. A loan is a loan so I don't see a problem with paying more on your payment or paying it off early. Getting out of school debt free is a great idea. "Pay cash and die broke"
3. 1. My first question is do you have a freezer? My next question is do you have a freezer save container you can place your credit cards in? If yes to both. Will you be ok with putting them in a bucket of water in the freezer? That's probably the only way I would do this. Yes, paying off your CC's with a student loan does make alot of sense, unless you just go use them. You need a very specific plan to not use them again(believe me. You need a very specific plan to not use them again) You're moving debt from A to B. You still have the same debt(with more from school.) So, make sure you don't use the cards again and you'll do great. Especially considering a number of student loans(not sure about yours because I don't know the specifics) provide tax deductions for the interest, forbearances, deferments and a number of other benefits. So, if you're disciplined enough to make this decision and can hold off your impulse buys on your cards I say go for it. Now. Someone else said leave a small balance to keep them open. No no. Do not ever leave a small balance on a CC. Don't let anything carry over. Most cards will not close you for at least a year with no activity(the majority will wait several years). Do not waste interest(I don't care if it's .05 cents) to keep a card. Charge a fill-up of gas every month and pay off every month if you really want to feel like your using it but never carry a balance. Also, never pay a fee. 2. Most student loans have no pre payment penalty. I can't speak about yours specifically(there's a number of options on the page you provided) However: If they do have a pre payment penalty, Put the money in a CD(or time deposit or mutual fund(risks?), out of sight out of mind) where it will earn money until your prepayment penalty period is over. Ask your lender. 3. Most student loan options will allow you to start paying back immediately with no penalty. Again, ask your lender. Many times though, it's not wise to start paying back immediately especially if you get a loan with zero % while you're in school. Better to start paying yourself in a savings then paying back the loan when you have to.
4. You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments - buildcredit.ifastnet.com
5. careers.scienceontheweb.net - it provides some tips about applying to US federal and state grants for college students.