Hi there! I graduated earlier this year with (thankfully) only one student loan. I saved quite a bit of money since graduating, and I have around 50% of the total loan cost saved. I was planning on paying off 50% of the loan when my payments begin in January, and then paying around 2.5 monthly payments each month. I was hoping to have my loan paid off in a year since it isn't that big (around $8,000 with interest).
But I am reading that paying off my loan quickly may actually hurt my credit! Just having this loan made me have bad credit, and I have worked my way up to average credit since I graduated.
What should I do? Should I pay off the huge chunk then make large monthly payments or make small monthly payments? I just don't want to have to pay off this loan for 10 years like they want me to!
IMO - I would pay this off ASAP. There are other ways to get your scores in order.
I agree with the other poster. Pay it off and open a credit card.
AAoA may be impacted a bit when you pay it off but you probably aren't sacraficing any payment history since you've likely been in school and not paying
Yeah no. I’m still learning about credit stuff, but there are so many other ways to build credit. Get rid of the loan and live life with a little less stress!!