Paying off private student loan

by andy h on February 14, 2006

I have a private student loan from a few years back that is charging me 14% interest. It is a variable rate and will probably go up again soon. My credit card company has offered me a balance transfer at 1.99% until November. The catch is that it has a 3% transfer fee. I can transfer $1900 onto my credit card. After doing the math it appears that I will save a small amount by doing this transfer. This wouldn’t be the case if the transfer fee weren’t capped at $50. I’m hoping by putting this on my credit card I will be motivated to pay down the balance faster. If I don’t this strategy might backfire since after November the rate goes up to 17%.

I could also use this transfer to pay off my other credit card. I don’t think that would be the best way to use it though. My other credit card is only charging 10% right now. Also if I pay my credit card off I might be tempted to run up the balance again. With the loan once it is paid off the debt is gone forever. If anyone has any other ideas feel free to share them.

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