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  1. #1

    Should I take this payment plan?

    Our final tuition payment is due this month. The bill is $15,500. We do not currently have that much readily accessible. My plan was to pay about $8,500 from savings and borrow the other $7,000 from our HELOC. That's actually part of the reason we got the HELOC to begin with.

    However, the school offers interest-free financing with the bill spread over 5 monthly payments. There is a one-time $45 plan enrollment fee which is 0.29% of the balance so pretty nominal. Doing that would save us the interest we would incur borrowing from the HELOC.

    I'm sure we can cash flow the 5 payments and even if we end up short at any point, we can still tap the HELOC then but we definitely wouldn't need to borrow the full $7,000 so we'd still come out ahead.

    Is there anything I'm not thinking of that would make the payment plan a bad idea? It sounds like a cheaper option than borrowing the 7K.

    ETA: The HELOC is at 3.99%.

  2. #2
    I think you thoughts are correct. Payment plan sounds like a good way to go from a cash flow standpoint and will save some interest over the HELOC.

  3. #3
    Congratulations on your final tuition payment! How exciting! The payment plan is less expensive than what the interest on the HELOC would be, so I would do the payment plan.

  4. #4
    Sounds like a good plan and it would mean that her school is all paid for when she graduates. I think from earlier posts you have been handling the finances without student loans, etc. But I may be forgetting something. You sound disciplined enough and you know your finances well enough to be paying out $1409 a month. If you can do it without squeezing yourself to tight that you don't have to eat oatmeal for months, then go for it. Congratulations by the way. This is a big feat that you have accomplished.

  5. #5
    She took a Stafford loan in August 2016 that she's already repaid and she took another this August that she's working on now. It was for $7,500 and she is paying back $400/month so it will be gone fairly quickly. She'll owe about $4,700 total when she graduates and DW and I will owe nothing. She'll be student loan debt free within a year of graduation.

 

 

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