topic Re: Repayment while in School? in Student Loans

Repayment while in School?

movinonup79 — Wed, 11 Nov 2009 18:28:42 GMT

I currently work full time and go to school full time. I am saving and planning on quitting work and transferring next fall (most likeley a more expensive school). Right now, I have extra funds every month and have a bunch of little loans showing on my credit (one for $902, 1250, etc.). Since I know I will undoubtedly accrue a lot more down the road, would it be okay to start paying loan by loan off? I'm eventually going to end up in law school and with a lot of debt. I know at some point I will need to take out private loans (thank goodness my BK's fall off in 08/10 and a dismissed in 02/11!).

My question is will beginning to repay help me out now? Will it affect my score? Will this repayment help me in the future to lenders and possibly receiving private loans?

Thanks!

Re: Repayment while in School?

llecs — Thu, 12 Nov 2009 04:48:01 GMT

movinonup79 wrote:
Will it affect my score?

Not likely. Impact of installment util is sooooo tiny, that you probably wouldn't see any change.

Re: Repayment while in School?

Anonymous — Sat, 21 Nov 2009 20:02:23 GMT

I agree with Llecs...but there is more to loans than just FICO. The total amount of outstanding balances will play a role in DTI, which can affect your ability to get new loans.

FICO puts you into a tier or grade, but the final decision often comes down to other areas, such as amount of debt, age of debt, payments over time (meaning you show an ability to service the debt consistently).

Therefore, IMO (and without any arguement intended) I believe you can only help your circumstances if you pay debt off whenever and however you can. Make sure you have emergency funds and put some into savings for reserve, but pay debt off and don't let it accumulate if you don't need to.

If you are borrowing money, but have money left over, then IMO you are borrowing too much money. Loans come at a price (interest) and you don't want to pay any more than you have to.