It is currently 22 Oct 2017, 20:16

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Carrying debt when heading to b-school

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
Current Student
Joined: 03 Oct 2009
Posts: 160

Kudos [?]: 13 [0], given: 7

Carrying debt when heading to b-school [#permalink]

### Show Tags

18 Mar 2010, 19:22
I need advice. I have some debt, unpaid car loan and some revolving credit card debt. I am heading to business school this Fall and I would like to know what my best options are.
A friend of mine suggesting taking out a loan to pay off my debt. Are there other options outside of paying it off. I would like to keep my car if possible. Thoughts?

Kudos [?]: 13 [0], given: 7

Current Student
Joined: 02 Jun 2009
Posts: 332

Kudos [?]: 58 [1], given: 12

Schools: Wharton Class of 2012 w/ fellowship
Re: Carrying debt when heading to b-school [#permalink]

### Show Tags

18 Mar 2010, 20:14
1
KUDOS
if you don't have much credit card debt, i would pay it off from savings or your pay checks (just tighten your budget over the next few months), although i'm sure most of us will end up using them again while trying to make ends meet as struggling students. i also have a car loan, i plan on selling my car (hopefully to a private buyer, if not, then to a dealer) and paying whatever difference there is between the sell price and what i owe (i'll never buy brand new again ), there's no way to pay for it while in school unless i hid it in my living expenses, but i don't see the point in paying a loan with a loan.
_________________

My story of an average chick who stumbled into the 700+ club
My 2009-2010 Application Decisions

Kudos [?]: 58 [1], given: 12

VP
Joined: 09 Dec 2008
Posts: 1221

Kudos [?]: 245 [2], given: 17

Schools: Kellogg Class of 2011
Re: Carrying debt when heading to b-school [#permalink]

### Show Tags

19 Mar 2010, 07:30
2
KUDOS
Generally speaking, you'll want to pay down as much debt as possible before entering school, since the lack of income while you're in school means you're making debt payments from savings or from student loans. That said, I know several people who have cars here and are making car payments, so it is possible. It's really up to you to decide whether having a car at school is worth the expense considering your student budget.

I would still recommend paying off as much credit card debt as you can, since there's really no upside to carrying credit card debt. Taking out a loan to pay off credit cards may make sense, if you can get an interest rate that's significantly lower and if you can afford the payments on the new loan while in school (credit cards generally have lower payment requirements than most loans).
_________________

Kudos [?]: 245 [2], given: 17

SVP
Status: Burning mid-night oil....daily
Joined: 07 Nov 2008
Posts: 2400

Kudos [?]: 746 [0], given: 548

Schools: Yale SOM 2011 Alum, Kellogg, Booth, Tuck
WE 1: IB - Restructuring & Distressed M&A
Re: Carrying debt when heading to b-school [#permalink]

### Show Tags

23 Mar 2010, 06:12
What Jerz is saying makes a lot of sense, especially regarding your credit card debts. For example, I am not sure what the interest rate on GradPlus loan is (I am fortunately not taking out any debt to pay for bschool), but I think it is around 9-10%. That is significantly lower than most credit card APR%. Therefore, I would probably take out additional loan at lower rate and payoff at least your credit card debt.
_________________

Kudos [?]: 746 [0], given: 548

VP
Joined: 09 Dec 2008
Posts: 1221

Kudos [?]: 245 [0], given: 17

Schools: Kellogg Class of 2011
Re: Carrying debt when heading to b-school [#permalink]

### Show Tags

23 Mar 2010, 08:39
nink wrote:
What Jerz is saying makes a lot of sense, especially regarding your credit card debts. For example, I am not sure what the interest rate on GradPlus loan is (I am fortunately not taking out any debt to pay for bschool), but I think it is around 9-10%. That is significantly lower than most credit card APR%. Therefore, I would probably take out additional loan at lower rate and payoff at least your credit card debt.

Right now, GradPLUS is 7.9% if your school participates in the direct lending program (money comes right from the govt) or 8.5% if it doesn't (money comes from a bank, with a govt guarantee). Many schools (including Northwestern) have switched to the direct lending program for the upcoming academic year in anticipation of the Obama administration doing away with bank involvement in student lending (a provision to do just that is included in the healthcare "reconciliation" bill that passed the House and is now in the Senate), but I don't know if the direct lending program will stay with the 7.9% rates once they're the only game in town.
_________________

Kudos [?]: 245 [0], given: 17

Veritas Prep Admissions Consultant
Joined: 19 Aug 2015
Posts: 324

Kudos [?]: 11 [0], given: 1

Re: Carrying debt when heading to b-school [#permalink]

### Show Tags

28 Feb 2016, 16:06
Why would you take out a loan to pay off your debt? Do you mean a consolidation loan? I don't think that going to business school should have much of an impact on how you deal with existing debt. It's not like buying a home where you can improve your credit score and therefore have some incentive to paying off your debt before taking on the new loan. Pay it down at the same rate as you were before school.
_________________

Mike
Veritas Prep | Veritas Prep Admissions Consultant

Find the expert who’s right for you. Meet our team!
Veritas Prep Reviews

Kudos [?]: 11 [0], given: 1

Re: Carrying debt when heading to b-school   [#permalink] 28 Feb 2016, 16:06
Display posts from previous: Sort by

# Carrying debt when heading to b-school

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.