Personal Loan

Hoping to get some advice here...

So I have several student loans back in the States that are in repayment. I am able to send money to my US account and pay easily enough but I was thinking about getting a personal loan here to pay off those debts. I know student loans are not bad debt as long as you are making your payments but here is the thing... I had to fully finance my college education to the tune of about $60,000 with several different loans - federal and private just to be able to cover everything (dad left 3 months before graduation and totally turned our family upside down financially).

Now, the federal loans are locked in at a low rate but its the private ones that are constantly being sold without notifying me or the rate is always going up. I always keep my address and phone numbers updated with the payment systems but when the banks sell them they sell it with the original application information (my contact details from 9 years ago) and then all of a sudden I have a late notice - then its really late bc it takes 2 weeks to get to me here in the UK, then I transfer the money and pay right away. Before anyone says to call the bank directly and let them know my updated details - I have, several times.

So basically I would be refinancing them but the rate I have been quoted here is at 4.7% with payments I can more than afford (I would pay more than the minimum payment) and a payoff term that I can meet. I would then have one payment, with a locked in rate and then I wouldn't have to worry about tracking these down every month or transferring in the appropriate increments home and paying to do so. I looked at refinancing in the states but by the time I graduated, the market crashed and they pretty much did away with refinancing student loans (shame. my cousin got hers financed at 3% right before the crash).  This could be a good way to continue building my credit here as well as I think the credit card rates here are much higher than I am used to so I would like to avoid that route.

Does anyone have any background in finance? It seems like a reasonable plan to me but am I wrong? What would be the tax implications of doing this? Can anyone advise?

Don't worry about hurting my feelings... I am just trying to find the best option to make keeping track of my finances between two countries as easy as possible. Sorry for the long post and thank you for your help!

I don't know anything about possible tax implications but think that having the debt in the UK, where you know you can service it, is a good idea.

And I applaud you for keeping up with your obligations, its not easy getting out from under debt but the feeling of satisfaction when you do is fantastic.

So far this seems like a better plan. I have done pretty well with paying off my loans with the exception of when they sell it and I all of a sudden get a call from another bank who now owns the loan and says I am behind a payment but usually they don't report that - or haven't on my part.  I am just ready to have one payment and be done with it. If for some reason we move back stateside then I would have to make the payments to the bank here but I can't see that being a massive issue.

OR should I just borrow enough to pay off the private loans in the states since those are the ones always being sold and the rate is always changing and continue to make the federal loan payments as I am doing now since those are locked in. That way I can continue to have payment history in the States while I am away?

Before I moved to the UK I worked in a financial institution in the states and I would say in my opinion you've got a very clear head about this. I would leave the federal loans alone and just continue the payments on them since the rate you're probably getting on that loan is lower then anything you'll be able to get anywhere else. But yes, for piece of mind and your credit, I would absolutely agree in refinancing the private loans to the UK. As long as the interest rate will be worth it for you. Not only will you probably save money by not having to pay any late fees from the private lien holders but you'll be helping your credit in the states. Odds are that even if you are paying your late payment less the 30 days past the due date, they are still probably noting your credit report. Though the big flags are when they note it for being over 30 days past due, it still hurts you if you have multiple notes of past due under 30 days.

So in all I'd agree this is a good idea. But that's just my opinion. Good luck! 


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I took out a personal loan several months after I moved here six years ago to pay off my US credit card debt.   Due to a lot of reasons, I had a huge amount of credit card debt and it was becoming unmanageable to make the various payments, the interest rates were going insane, I was getting hit with late payments, problems with foreign addresses, etc (sounds a bit like your student loans, though I wasn't having to deal with the credit card debt being sold off). 

Somehow, I actually qualified (see the numerous threads about credit and credit history from various UKY folks to see how miraculous this actually is so early into a move) for a personal loan through my bank.  I was then able to pay all the US debt off and I had one payment to make here, at a much lower interest rate than the credit cards, and I could make payments through direct debit on my bank.  I fully paid this loan off last year and I am 100% debt free now.

So, I personally think that if you can qualify for the personal loans and you can manage the payments and you fully research all your options for interest rates and see if it's actually worth doing all of this, than it will probably work in your favour.   

Good luck!!