Together my wife and I have about $80,000 in student loans. My mother in law is in the process of selling her house. We proposed the idea of borrowing ~$50000 from her, once she sells, so that we could pay off our loans with higher rates. We offered to pay her back with an interest rate of 5%. Our idea was that we would be able to pay off all of the loans with a rate over 5%, and she would get a (nearly*) guaranteed 5% return rate.
Does this plan make sense to all parties involved?
Loan amounts and rates (from a couple of months ago, may update when I have more time):
$10,541.19 8.63% $16,966.98 8.38% $ 6,423.44 6.55% $ 6,341.26 6.55% $14,715.64 6.50% $ 7,107.64 4.41% $ 2,126.34 4.25% $ 3,637.38 3.61% $ 3,438.88 3.61% $ 2,779.82 3.61% $ 4,131.47 3.15% $ 3,482.91 3.15% $ 697.95 3.15%
Some other relevant information:
- We've already bought a house
- We own both our vehicles (actually have a third we need to sell)
- We're currently bringing in a little more each month than our monthly expenses, but can (and probably will) cut back in certain areas to have extra to pay off loans with even faster
* I only say nearly as you never know what could happen, but we have every intention of paying it all back at that rate.