Should I pay off my student loans?

BoatsNBeer said
The loan debt may be viewed a little unfavorably by a mortgage company. However, I had over $100k in student loans in 2007 when I bought my current house and got a pretty good rate. However, the mortgage company would MUCH rather have the money he used to pay off the SL's as a downpayment than having the other loans paid off. The larger the down payment the better rate he would get, more so than having the SL's paid off.

Of course you probably would have gotten a better rate had you had your house paid off. Then again, back in 2007 many mortgage companies were pushing through lots of mortgages they should have at rates they didn't deserve, so maybe not. I mean the crazy approach to lending back then is part of what put us here. Lending to the recently bankrupt, not substantiating income, etc etc all got people into houses they shouldn't have been. But that is a totally different situation.

I can't see a situation where you'd get a personal loan to pay off the student loan just b/c a student loan can not be discharged in bankruptcy. If you did that and then declared bankruptcy that might border on fraud. It certainly would not be looked at favorably by a bankruptcy court.

Of course you can't change out your loans then declare bankruptcy, that would indeed be fraud. However, if planned right it could certainly work. Downside is it requires some good planning and a serious handle on your finances. Most people that declare bankruptcy don't have either or get blindsided by some outrageous unexpected expenses (such as medical bills).