Does this loan payment strategy make sense?

[Proprioceptive]

Alright, so to begin with, I completely acknowledge that I am not the most knowledgeable with financial matters, but here goes.

I have some private and federal educational loans out and since I got married, I'm eligible for grants/lower interest federal loans. I can successfully avoid taking on more debt so I've moved to debt payoff mode while I'm finishing my last two years of undergrad. My plan is to continue accepting the low interest loans and using those funds to payoff portions of my higher interest loans. Is my logic here flawed or is this smart?

 

[Bignate603]

This could make sense but you need to look at everything. Look at the payments you'll need to make after you get out of school and decide if it is possible to pay. I can foresee one potentially bad scenario. If you're low interest loan only covers a portion of your high interest debt you now have TWO loan payments to make each month. While you would be paying less interest over the life of the loans you may not be able to afford the two loan payments.

Another bad situation would be if they difference in interest rates is small and the fees to take out the new loan are high.

 

[Proprioceptive]

Originally posted by: Bignate603
This could make sense but you need to look at everything. Look at the payments you'll need to make after you get out of school and decide if it is possible to pay. I can foresee one potentially bad scenario. If you're low interest loan only covers a portion of your high interest debt you now have TWO loan payments to make each month. While you would be paying less interest over the life of the loans you may not be able to afford the two loan payments.

Another bad situation would be if they difference in interest rates is small and the fees to take out the new loan are high.

From my calculations, it should help out. The rate difference is 6.75%... yeah, I know, the private loans were high.

 

[speg]

Go for it.