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Hi - I have learned a great deal off these postings for many years. I have worked aggressively to live beneath my means and get rid of credit card debt. about 30K.

I funded both a BS and grad school with stu loans and credit cards. Graduated grad in 2002.
Consolidated loans in 98 and then again in 02. Student loan was 83K at 5.65 - 1/4 with direct debit. Currently owe about 80K.
In 11 more months rate will drop 1 point to bring me to 4.625.

Currently max out 401K and Roth -
Cannot deduct Stu loan interest
8 more months on a car loan at.9% interest - this will free up another 363/month

House recently got appraised for 210K owe 141K

Should I pull a HELOC, combined with a 0% credit card and transfer the stu loan and get the tax write off?

Or keep the stu loan and invest 10K/yr in a taxable account?

Or do a mix of both?

Thoughts?
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Always keep the student loan.
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Always keep the student loan.

Why???

Sweetmocha :-)
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Always keep the student loan.

Why???


- It's unsecured, so defaulting won't result in loss of property ("just" money).
- It's tax-advantaged. (If the reason the OP can't claim interest is a high income, well, that could change without warning.)
- The interest rate is low compared to most debts, is capped (at least it was in my day), and is the only debt (that I know of) where you get rate reductions just for making payments on time.
- Unlike other debts, it will go into hibernation if you return to college.

-majeest
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Can you get a HELOC for a lower rate than your student loan?

The only question I'd consider is the transfer of unsecured debt to secured debt. Is the loan subsidized?

Unless I misunderstood -- you have a 0.9% interest rate on your car? If so, leave that loan alone. It's practically free money.

To answer, I'd run the numbers ... how long will it take you to pay off the $80K at your student loan rates versus at the HELOC rates. See what you save and then ask if that amount is worth any risks of such a transfer. The tolerance level is up to you.



Best,


CPAScott
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