Received Student Loan Check Today, What Should We Do With It?
Today we received my wife’s last student loan check for her education; she finally finishes school in May. Hooray! It is for quite a bit more than the tuition, leaving us with a few thousand bucks to “play” with. My thoughts on this are as follows:
Since the loan does not start accruing interest until a few months AFTER she graduates, we are not losing anything by keeping the money instead of just depositing the check and sending a big payment to the overall student loan debt. Of course, the ideal thing would be to just send it to our credit card which has about the exact same balance on it, but it is at 0% interest until June 2007. Then we could then look at our overall financial record and see that there is NO credit card debt on any card, and the only thing we owe on are cars and her student loan.
So…..any thoughts on this? Would you keep the money and earn some interest on it? Would you pay off the balance of the 0% credit card? Or would you just cash the check and send a big payment to the student loan, using their own money to pay back what they loaned you?
Decisions, decisions. This check is just sitting here begging me to go pick up a plasma TV, but of course I know better. Or do I? 
Kidding…
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Dave | Jan 25, 2007 | Reply
Hard to say without knowing more, but I might consider depositing it into a high-interest savings account (ie emmigrant direct) to pick up a few extra bucks before paying it back.
Ellen | Jan 25, 2007 | Reply
Instead of using it to pay off 0% interest loans, I’d throw it into HSBC and get 5.05% on it until June when you have to start paying. Of course, if you’d be more emotionally comfortable with a lower amount of debt, rather than earning a few bucks of interest, you should definitely pay off one or another of the debts.
David | Jan 27, 2007 | Reply
Well we have decided what to do with the money. We are going to pay off my wife’s $500 dentist bill, the balance of the credit card, and put the rest in our ING account. Feels good to have that stuff paid off, even if the amount is added to the student loan balance. Once that starts coming due, its time to start shoveling money at it!
Thanks for the advice everyone!
Stingy Student | Jan 30, 2007 | Reply
I wrote a post a couple of weeks ago on where to put your money: http://stingystudents.blogspot.com/2007/01/get-your-gs-together-g-2-high-yield.html
Also, HSBC is offering 6% on new balances! I wish I had waited a couple of weeks before depositing my loan check