Student loans and Good Finance cards are two of the most commonly held types of debt – and two of the most difficult to pay off. Concentrating on one debt at a time is the most effective way to pay off multiple debts. With this strategy, you will make large, flat payments on just one specific debt and minimum payments on everyone else. Finding out whether students can payout loans or Good Finance cards can be tough at first.
Before you work either kind of debt towards aggressively paying off, make sure that you are current on making payments on all of your accounts. It doesn’t fully benefit you from ignoring payments on one debt so you can pay off the others. Not only will harm fall behind your Good Finance score, but it will also make it harder to catch up and pay your bill.
To check whether to pay first student loans or Good Finance cards
We will pit the debts against each other in some key repayment categories. The “losers” in each category receive one point. The debt with the most points, in the end, is what you should pay first. These are the repayment factors to consider:
- Consequences of not paying
- The ability to have the debt canceled
- Repayment flexibility
- Easy catch up on past due balances
- The long-term cost of debt
- total credit
- Good Finance’s ease of taking up even with debt
Both student loans and Good Finance cards are a type of unsecured debt. This means that there is no collateral attached to the debt like with a mortgage or car loan.
If you fall behind on your payments, the creditor or Good Finance giver cannot automatically repossess all of your properties to meet the debt. There is an exception to federal student loans. In some cases, your federal tax refunds can be used to meet federal loans instead of distressed students.
Failure to pay on both types of debt will affect your Good Finance score. After several months of missed payments, the creditor or Good Finance giver can hire a third-party debt collector to track the debt.
You can be sued for overdue debt and conduct the lawsuit in a judgment against you. With the judgment, the court can grant a garnishment or bank levy. This collection path can happen with past through Good Finance cards or student loan payments.
The bottom line: The possibility of having tax refunds taken makes student loans a little worse off. Student loans get one point in this round.
The ability to cancel the debt
One of the biggest differences between student loans and Good Finance cards is the relative ease of having to go bankrupt to debt. It is possible for student loans to have discharged bankruptcy debts, but the burden of proof is tougher.
You have to prove that paying the debt would cause you to live below the minimum living standard, that you will not be able to make payments for a significant portion of the term, and that you have already (unsuccessfully) tried to work out a payment schedule with your Good Finance giver. This level of evidence is normally not necessary to have Good Finance discharged into bankruptcy.
Some student loans are for forgiveness programs that cancel some or all of the debt. This type of debt relief is not available with Good Finance cards. In some cases, Good Finance card companies, under a settlement agreement, cancel part of the outstanding amount that you are negotiating.
However, these types of settlement agreements are not common, are bad for your Good Finance, and are usually only made with Good Finance card accounts with past history. If your account is in good standing, your Good Finance card issuer will not have a settlement agreement to maintain.
The Verdict: Student loans can go bankrupt (in certain situations) and be discharged. Good Finance cards lose this category because the only options for debt cancellation – bankruptcy and debt settlement – are both detrimental to your Good Finance score. both are detrimental to your Good Finance score.