Conversely, you can also use your credit card to take out a cash advance, then use that money to pay your student loan bill. Just remember there are hefty fees involved in taking out a cash advance , either through an ATM or those handy convenience checks.
Not only that, but cash advances typically come with a higher interest rate, making this option even more expensive and less attractive. Here are the top credit cards for covering your student loans this year. First, get copies of your Equifax, Experian and TransUnion credit reports and fix any mistakes to improve your odds of credit approval.
Then, check your credit score to see where you stand and review the cards offered in your credit range. Take a look at credit cards with zero percent introductory APR offers to reduce your interest payments when you pay your student loans with your new credit card.
Payments by convenience check or Plastiq might take longer than a direct payment. Follow up to make sure the payment process went off without a hitch. Finally, work out a budget to pay off your credit card during the zero percent introductory APR period. You may want to take your cash back rewards and apply them to your statement balance to pay off your debt faster.
You could switch your repayment plan or even refinance your student loans to secure a lower interest rate, a lower monthly payment or both.
The card details have not been reviewed or approved by the card issuer. The Wells Fargo Platinum card is no longer available. How We Make Money. Holly D. Written by. Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics.
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Bankrate Logo Editorial Integrity. Key Principles We value your trust. Bankrate Logo Insurance Disclosure. The risks of paying student loans with a credit card Using credit to cover regular expenses can pay off, but there are risks involved. Read more From Holly. Want to make extra student loan payments? If you want to add a little extra to your payments each month, this is a good way to do it.
You can also use this in conjunction with auto debit. Download the award-winning Sallie Mae mobile app. Make a student loan payment to individual loans from your bank account through our automated phone system at SALLIE.
Payments by phone will be effective the same day for which they are scheduled. You can make student loan payments by mailing in a check or money order. Allow at least 7 — 10 days before your due date for your payment to be credited in time. If your payment is late, you may be charged a late fee. Third-party bill-pay services may include payment services offered by your financial institution. Provide them with the applicable digit Loan Group Number and allow at least 7 — 10 days before your due date for your payment to be credited in time.
If your student loan payments are late, you may also lose your eligibility for borrower benefits or repayment incentives. Late payments may also be reported to consumer reporting agencies, which could negatively impact your credit report. Apply for the Graduated Repayment Period to get flexibility on your loan payments by making interest-only payments for one year after your separation period ends. Home Student loans Manage your private student loans Prepare to pay your student loans Ways to make student loan payments Ways to make student loan payments You have a choice of how to make your monthly student loan payments; choose what works best for you.
Automatic debit recommended When you enroll in auto debit, you can choose to pay the Current Amount Due, which is the amount required to be paid each month until the loan is paid in full, or you can choose to pay more each month, which may help lower your Total Loan Cost. Enroll in auto debit. The U. Treasury Department no longer allows student loan payments to be made by credit card. Despite this, some people still try to find ways to transfer their student loan balances to a cash rewards credit card.
But there are a few things you'll need to consider before making that transfer from your student loan lender to your credit card company. Let's look at whether you can earn credit card rewards from paying your student loans, how to do it, and whether it is a good idea. If you deal with a student loan servicer that accepts credit card payments for no fee or a low fee or is willing to waive the fee , you might be able to earn significant cash back by using your credit card to make your loan payment.
It also depends on whether you are the type of person who always pays your credit card bill in full each month. First, you'll need to apply and be approved for a credit card with a large sign-up bonus plus ongoing cash rewards. These cards are usually reserved for people with very good to excellent credit.
Remember, not all credit cards are created equally—meaning not all cards allow you to transfer your loan balance. So, you'll want to make sure you have the right card. This is the card you'll use to make a significant, one-time extra payment on your student loan. Then, before making the payment, make sure your credit card issuer won't characterize the transaction as a cash advance —and get that confirmation in writing. Also, let your credit card issuer know ahead of time that you're going to be making a large transaction so it won't be declined or flagged as fraudulent.
After making the payment, keep an eye on your credit card account to ensure the transaction posts as a purchase, not a cash advance. Make sure you know your limitations and the terms and conditions of your card before you make the transfer.
First, you'll want to make sure you can transfer only as much as you can afford to pay back to the credit card company. Don't get overindulgent to get the points or the rewards if you can't at least meet the minimum payment requirements of your credit card.
Secondly, if you're doing a balance transfer, know that these transactions may come with a higher interest rate. So if you can't make the full payment at the end of the statement month, you may be paying a higher interest rate than a regular purchase transaction. If it's a new card, you may be able to benefit from low- or no-fee balance transfers for the first six to 12 months. Can't do a balance transfer? Contact your credit card company for a convenience check. You'll write this the same way you write a check from your bank account, except it's drawn on your credit card.
But keep in mind, convenience checks can also come with a high interest rate, so you'll want to know what rate and fees apply. You can also try making payments through third-party processors like PayPal, Stripe, Plastiq, or Square. These systems will charge your credit card directly and then send a check or a wire payment to your student loan company. But beware: You may be charged a fee for using their services.
Some of them charge a percentage of the payment balance, so you'll want to be sure how much more you'll be paying. Some of these companies may offer incentives and promotions or lower fees. If you're someone who typically carries a credit card balance, it doesn't make sense to make your student loan payments with your credit card.
Student loan interest rates are generally lower than credit card interest rates. So, if you're having trouble making your student loan payments on time, it may be cheaper to incur a late payment fee to the student loan company instead of accruing interest on a credit card.
You'll also lose any protections that cover student loan debt. Unlike credit cards, there are certain rights you have as a student loan borrower. Consider some of the options you have as a student loan borrower, such as income-based repayment plans, payment deferments, or even forbearance. These options allow you to stop making payments while interest still accrues on the loan, and these options are not available to credit cardholders.
Paying off a large chunk of your student loan with a new credit card can help your credit score in several ways. Applying for a new credit card will temporarily ding your credit score.
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