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New Contributor
Posts: 52
Registered: ‎03-09-2009
0

Pay off student loans or keep them as long as I can?

Hey everyone, quick question about student loans. Below are all of my student loans: On the first one I am co-signer, the next three are my loans with balance and the rest of them are paid off. 

 

They are currenly on auto pay and my monthly payment is 137.37, with 0.14% interest on each loan, If I were to take them of off the auto pay interset on each loan would go up by 0.25%. I also found out that I over paid my account in the past by so much I would not have to pay my next payment until 2014. I am wondering if I should keep these loans on my account as long as I can, so they would help me have a very long credit history, or should I just keep paying off the monthly payment and pay them off in the next few years. 

 

What do you guys recommand? the interest rates are so low I would not accumulate much interest over the next 10 years even, or I could make really small payment to pay for them as long as I can just so they would stay on my account for as long as I can keep them to build a great long history. All recommandation are welcome, and thanks for the advice in advance.

 

Polslv/Uas (Personal Student Loan)

Approved for $75,000

Balance $33,550 (Co-Maker/ Co-signer)

Opened January 2010

 

Aes/Pnc

Loan Amount $5,500

Balance $2,494

Opened 8/2005

Montly payment - 64.99

Interest rate - 0.14%

 

Aes/Keysto

Loan Amount $3,500

Balance $1,587

Opened 8/2004

Montly payment - 41.36

Interest rate - 0.14%

 

Aes/Keysto

Loan Amount $2,625

Balance $1,190

Opened 9/2003

Montly payment - 31.02

Interest rate - 0.14%

 

Natl Coleg (Personal Student Loan)

Loan Amount $15,625

Balance $0

Opened 9/2006

Paid Off/Closed October 2010

 

Aes/Pnc

Loan Amount $8,633

Balance $0

Opened 9/2007

Paid Off/Closed October 2010

 

Aesconduit

Loan Amount $5,500

Balance $0

Opened 8/2006

Paid Off/Closed 12/2009

 

Aes/Keysto

Loan Amount $5,500

Balance $0

Opened 8/2007

Paid Off/Closed 3/2009

 

Natl Coleg

Loan Amount $10,526

Balance $0

Opened 8/2005

Paid Off/Closed 8/2008


Starting Score: TU-775; EQ-799; EX-766
Current Score: TU-775; EQ-828; EX-828
Goal Score: TU-800+; EQ-850; EX-850


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Established Contributor
Posts: 731
Registered: ‎08-12-2011
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Re: Pay off student loans or keep them as long as I can?

Wow, you got some nice interest rates there on those loans. I believe those closed accounts will stay on your report for 10 years, so you will show a positive account till 2018 for the loan paid off in 2008. With your obvious repayment schedule, you seem to be well off financially. I see no reason not to continue to pay monthly for the accounts with 0.14% interest. Those accounts will stick around longer past the 2018-2022 fall off dates that your paid off loans. You could avoid a huge drop in AAoA in 2023.

 

I did not catch the interest rate on the $33k outstanding loan. I'd focus on bringing that balance down.

 

 

New Contributor
Posts: 52
Registered: ‎03-09-2009
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Re: Pay off student loans or keep them as long as I can?

the student loan for the 33K is not my, I am just the co-signer on it. The interest rate on that one is 3.25. My girlfriend just graduated college started work  month ago and she will start paying that one off. I think I will continue making the minimum payments on the last 3 loans that are my untill I pay them off, I believe it says I should pay them off by like 2018 or earlier. 

 

I also have a car that I payed of in 2010, a  motorcycle loan I took out last year, and a new car loan I took out beginning of this year. I Once they student loans start dropping off I should still have other ones to keep my AAoA up.


Starting Score: TU-775; EQ-799; EX-766
Current Score: TU-775; EQ-828; EX-828
Goal Score: TU-800+; EQ-850; EX-850


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Member
Posts: 14
Registered: ‎12-01-2012
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Re: Pay off student loans or keep them as long as I can?

How did you get .14%?!
Current myFICO Score: 747 as of 12-1-2012
New Contributor
Posts: 52
Registered: ‎03-09-2009
0

Re: Pay off student loans or keep them as long as I can?

My government loans were either 6.8 or 4.8 when i graduated, i paid off the ones with higher interest first. The ones that remained, the interest rates after a while went down either by using automatic payments or making payments for 2 years. I know there was some governemnt thing that was passed that dropped my loans to 2.something after graduating. 

 

I really could not tell you how it happened, I know I didnt do anything special just kept paying my loans and the interst rates would decrease after a while. Sorry I can't be much of help.


Starting Score: TU-775; EQ-799; EX-766
Current Score: TU-775; EQ-828; EX-828
Goal Score: TU-800+; EQ-850; EX-850


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Established Member
Posts: 12
Registered: ‎10-25-2007
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Re: Pay off student loans or keep them as long as I can?

Those interest rates are AMAZING!  So, did you contact them and negotiate for a decreased rate if you paid on time?  Who is your lender or loan services? Could you tell us what your payments were and what you actually paid each month?  Did you make payments on the interest while you were in school?  Less than 1% interest is unimaginable and unless I saw it, I wouldn't believe it was even possible.  Is there any way you could find out how your rates were dropped so low?

 

In response to your question, I would keep paying the min for your loans, and not pay it off; it seems like its really helping your scores.

Established Contributor
Posts: 731
Registered: ‎08-12-2011
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Re: Pay off student loans or keep them as long as I can?

[ Edited ]

Yes, those rates are quite extraordinary. With rates of 0.14%, it is practically free money. Instead of paying off the loans, you would be better off just keeping money in to invest it. The low rate is giving you the opportunity to invest in something with a better return while still creating a great tradeline to have past 2022. I would first look into a money market account, then a mutual fund or two. Once I had a good size padding there, I would follow that with an IRA, ETFs (maybe). Finally start building a stock portfolio.

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