Advice on mortgage and student loan payoff with a personal loan - The Bills.com Blog
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Advice on mortgage and student loan payoff with a personal loan
Question: Hi, I have a question about mortgage and student loan payoffs. I just bought my home last year for around $80K and I have a student loan in deferment of about $20k. I also have hospital bills for my wife and I of about $7k. Now if it was possible, would it be better to take a personal loan of $110k and just pay everything off,and then pay the personal loan monthly? Thank you.
Answer: The answer is no... No one will do a $110k unsecured personal loan in this marketplace. Personal loans usually have an upper limit of about $30000. In addition, the interest rates charged for personal loans are usually much higher than rates for either mortgage loans or student loans. Therefore, even if it were possible to get a personal loan for that amount, the interest rate on it would be considerably high. You need to plan your strategy carefully. You say that you bought
your home only last year, given that information I am guessing you do not have much equity in your home to apply for a refinance or even a home equity line of credit.
You have not specified as to how long the deferment on your student loan will last, if you still have time, it does not make sense to start paying interest on another loan to repay your student loan debt. Now as far as the medical bills are concerned you can always speak to the creditor and come with some sort of payment plan.
Depending on how much time you have left on the student
loan, your strategy should be to build equity in your home and pay down the medical debt as much as possible. Once the deferment period on the student loan nears its end then you can start to think of a mortgage refinance to then club your student loan along with it. Remember that it only makes sense to consolidate your debt if the net interest rate that is charged is lesser than what you currently pay. I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
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