Originally Posted by RB
Since student loans aren't unsecured, would it be a good idea to maybe pull out an LOC (if you had a current mortgage payment) and payoff the debt on the student loan with that LOC, then have a secured debt instead of an unsecured debt?
do you mean like a home equity?
you
could do that but the benefit wouldnt necessarily make it worthwhile.
if you can find a secured LOC with an interest rate as low as a gov't issued student loan, then yeah its not a bad thing. but, chances are you wont be able to. right now prime is 8% i know my student loans are like 3% if it's a private student loan (key loan for example) it will probably be more worth your while cuz some of those have insane rates.
furthermore, a lot of creditors look at student loans as .... "clutter" i guess is a good way to say it. its there but if you have 20k in credit card debt, they see that as "bad debt" but if you have 20k in student loans its not as bad. kinda weird.
also, having something like a home equity cuts back on your houses LTV (loan to value) which is just a relationship to what you owe and what it's worth. that only matters if you wanted to refinance or something.
either way (student loan or home equity) your interest is tax deductable. thats a good thing. but overall, might not be worth it.