By today’s standards, this is outrageously high and loans with interest rates this high are darn near impossible to pay off in a decent amount of time. Moreover, by time all of interest is paid it almost doubles loan amount. I guess you could say this is magic of compounding in action. And unlike traditional loans that can be financed at a lower rate, student loans don’t have this option available. So, most people just trudge along and continue to pay year after year after year.

However, after some research and creative financing I have come up with a viable way to get around high interest rates thus shortening time it takes to pay off old loans and pay less in overall interest.

Basically, I contend that one of best ways to eliminate student loans quicker and at a much lower interest rate is to transfer old loan onto a credit card that offers a low to no interest rate on balance transfers. To verify this I asked my friend Terry Rigg, owner of The Budget Stretcher (http://www.homemoneyhelp.com) to do comparison calculations.

Here’s a comparative analysis he did. A student loan in amount of $15,000 at 9% with a payment of $300 per month would take 5 years 3 months to pay off with a total interest amount of $3,870.56 in interest.

However, by transferring this same $15,000 to a low interest credit card with an interest rate of 3.9% for life of balance transfer, it will only take 4 years 7 months to pay off making same $300 per month payments. The total interest paid would be $1,337.90: a total savings of $2,532.66 with a pay off eight months sooner.