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If you are struggling to make payments, you can use balance transfer checks or an intermediary service to transfer student loan debt to credit cards. An intermediary service, such as Plastiq, makes payments to the loan provider on your behalf. Making student loan payments with a credit card may have some benefits, depending on the card terms. But doing so also carries some serious risks. U.S. Department of the Treasury regulations prohibit lenders of federal student loans from accepting credit card payments. Although there are ways to get around these regulations, the real question you should ask yourself is: *Is it worth it? *
If you are struggling to make payments, you can use balance transfer checks or an intermediary service to transfer student loan debt to credit cards. An intermediary service, such as Plastiq, makes payments to the loan provider on your behalf. Making student loan payments with a credit card may have some benefits, depending on the card terms. But doing so also carries some serious risks.
U.S. Department of the Treasury regulations prohibit lenders of federal student loans from accepting credit card payments. Although there are ways to get around these regulations, the real question you should ask yourself is: Is it worth it?
Using An Intermediary To Make Payments
If you don’t have a checking account, or you simply don’t have enough money in your checking account to cover your student loan payment, an intermediary transaction may be worthwhile. Businesses like Plastiq accept credit card payments with a 2.5 percent fee, then send a check to your student loan servicer.
If your credit card rewards program exceeds that 2.5 percent fee, an intermediary transaction may actually work in your favor. [Read more…]