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Paying off a large chunk of student loans - trying to find a mileage opportunity

Paying off a large chunk of student loans - trying to find a mileage opportunity

Old Apr 12, 10, 9:37 pm
  #1  
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Paying off a large chunk of student loans - trying to find a mileage opportunity

Here's the nitty gritty.
I have a large chunk of money set aside ~$36K to pay off a student loan.

The company that services the loan seems to only accept ACH payments online.

Any suggestions on making this transaction work for miles somehow?

I currently hold a Citi AA card, Chase BA (100k offer), and Delta Amex. I'm a PhD student so my income is limited and I'd like to find a way to make this work. Maybe one of the banking offers? Thoughts?

Thanks all.
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Old Apr 12, 10, 10:38 pm
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Who is the servicer? Have you called them about options? I know Sallie Mae will take a CC, but only for the monthly balance that is currently due (last I checked...)
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Old Apr 12, 10, 10:58 pm
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Originally Posted by JB5150 View Post
Who is the servicer? Have you called them about options? I know Sallie Mae will take a CC, but only for the monthly balance that is currently due (last I checked...)
Really? I can't find anywhere on the Sallie Mae website to pay via CC. Please do tell.
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Old Apr 13, 10, 6:48 am
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Consider the following instead:

1. Consolidate the loans at a low interest rate.
2. Put all that cash into high-yield investments (Roth IRA, brokerage accts)that will outpace the interest on the loans.
3. Pay the loans off through the standard payment plan.

Between consolidation and the discounts offered with automatic payment plans, you should pay around 3-5% in interst on the loans. It's reasonable to expect at least 10% yield on a Roth. This doesn't even count the tax advantages of student loan interest deduction and Roth disbursements.
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Old Apr 13, 10, 7:21 am
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Forget it, you can't knick a cc (and earn miles) to pay off the student loan. I have always wanted to do the same (my GSL is through Direct Loan). But, if there's some genius out there who disagrees, please do tell!
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Old Apr 13, 10, 2:25 pm
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Join Date: Mar 2010
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Where can I get a 10% yield on my Roth IRA? I could buy some junk bonds, but then you're principal isn't even remotely insured.



Originally Posted by Jazzop View Post
Consider the following instead:

1. Consolidate the loans at a low interest rate.
2. Put all that cash into high-yield investments (Roth IRA, brokerage accts)that will outpace the interest on the loans.
3. Pay the loans off through the standard payment plan.

Between consolidation and the discounts offered with automatic payment plans, you should pay around 3-5% in interst on the loans. It's reasonable to expect at least 10% yield on a Roth. This doesn't even count the tax advantages of student loan interest deduction and Roth disbursements.
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Old Apr 13, 10, 2:43 pm
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Assuming the OP has at least 20 years before retirement (not unreasonable, given his PhD student status), 10% is a common estimated yield over such a long term. Assuming you aren't so chicken that you only invest in securities. I'm not going to get into a debate about insured investments vs. making money.

Originally Posted by adamkornfield View Post
Where can I get a 10% yield on my Roth IRA? I could buy some junk bonds, but then you're principal isn't even remotely insured.
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Old Apr 13, 10, 4:11 pm
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Originally Posted by 4Health View Post
Really? I can't find anywhere on the Sallie Mae website to pay via CC. Please do tell.
Give them a call (though you will be talking to one of their wonderful agents in India)-- it is possible to do it over the phone, though they charge you a fee of around $15 and you can only pay the monthly amount due. If that happens to be a fairly substantial amount, then the cpm with the extra charge might be worth it.
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Old Apr 13, 10, 4:26 pm
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Originally Posted by Jazzop View Post
Consider the following instead:

1. Consolidate the loans at a low interest rate.
2. Put all that cash into high-yield investments (Roth IRA, brokerage accts)that will outpace the interest on the loans.
3. Pay the loans off through the standard payment plan.

Between consolidation and the discounts offered with automatic payment plans, you should pay around 3-5% in interst on the loans. It's reasonable to expect at least 10% yield on a Roth. This doesn't even count the tax advantages of student loan interest deduction and Roth disbursements.

Private loans - consolidation isn't really an option, only replacing with a different kind of loan. They're also graduate, with an interest rate around 7%, variable, with nowhere to go but up in this economy. I was doing what you suggested for some time, then lost a substantial amount of money (as we all did). While the time horizon makes it possible to eek out over 8 percent, my risk tolerance at this point is low.

It unfortunately seems there's no way to skirt around the payment from checking only rules to use a CC for paying off large chunks.

The servicer is ACS.
ginandtrombones is offline  
Old Apr 13, 10, 4:50 pm
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Join Date: Apr 2010
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If you had bought UAUA last July and you could have got 600% yield now
Originally Posted by adamkornfield View Post
Where can I get a 10% yield on my Roth IRA? I could buy some junk bonds, but then you're principal isn't even remotely insured.
Corylopsis is offline  
Old Apr 13, 10, 11:26 pm
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Pay the loans off with gold coins :-D
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Old Apr 15, 10, 1:56 pm
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I have a student loan through CitiAssist that I'm paying off with my credit cards. There's an option with CitiAssist where you can pay with a credit card (processed through Paypal with no fees) if your loan registered address is outside the US - easily changeable online. I've been using my US-address registered credit cards to pay with no problem for a couple of years now. Nice loophole
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Old Apr 27, 10, 9:37 pm
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My son's school (UC, Santa Barbara), through whom we both have loans for him, prohibits paying with a credit card. Maybe there's a workaround, but at orientation, they assertively said that they would do all within their power against any scheme that enabled a student/parent to do so. They said it's for our own good.
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