Credit Card Center Advertiser Disclosure†
08-07-2009 09:58 AM
08-13-2009 12:13 PM
I have a deferred student loan and I made a payment on it and noticed that my entire payment went to the principal and 0 to interest (subsidized loan). So, I will continue to make payments on it and if you are able to make at least the minimum payment by all means do!
08-10-2012 12:51 AM
I hate to bump a 3 year old post but I have a similar question and I dont think the OP got the answer he/she was looking for.
Im in the same boat. I currently have a student loan. Just one and it isnt even $2500. Im still in school and really dont need to take anymore student loans. So my question is how will paying on a student loan while it is in the deffered status affect my credit. Will it hurt my score because the interest is out of the picture or will it help as if it was a normal loan with payments being made to it? If I made a few payments over the course of a few months and dropped it below 15% would this help my overall score?
Not to come off rude but I dont need to hear about the benefits of paying it off now vs later and saving money on interest. I am trying to raise my credit score (and have been for several years). Money isnt really an issue and if it came down to it I would take the interest if it meant raising my score.
Any advice concerning this issue would be greatly apprieciated,
08-12-2012 12:49 PM
Payment of interest does not help your credit score. Your score doesn't know whether you paid interest or not. Do you have any other installment loans on your credit such as a car loan or mortgage? Remember, you don't have to defer your student loans. If money is not an issue, then you can call the bank, ask them to start payments now, and take your loan out of the deferment status. This way you are helping your score, and you are not blindly being charged interest.
08-12-2012 01:15 PM
Thank you for your reply.
I do not have a mortgage or auto loan. The student loan is one of those Federal loans that wont build interest until 6 months after I am out of school.
So when a student loan is deffered and you make payments on it what effect does this have on your credit? Does it show a payment history or does it just change what is reported that you owe?
08-12-2012 01:24 PM
Its the same impact on your credit. While you are "deferred" the system is just reporting that you are "making your payments as agreed", even though there truly is no payment due. My advice is that if you have the funds, go ahead and make payments toward your loan as it will have the same positive impact as just holding your loan in deferment.
You should also check out the credit card section as revolving lines of credit do much more for your credit score than installment loans.
08-13-2012 08:39 PM
You might be taking a ding on your score for having installment loans with balances close to the loan amount. I have several student loans in defferment and that is one of the reasons I was given for a lower score.
08-13-2012 09:35 PM
You don't have to take your loans out of deferment status to make payments, just an FYI
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.