topic How much will paying on student loans help? in Student Loans

How much will paying on student loans help?

Anonymous — Tue, 01 Mar 2011 23:01:47 GMT

So, I owe (don't gag, spit your food, or otherwise, have a stroke - I've done all of them); $113,000 (I was in school for MBA, Law, and now pre-med).

Anyway, I figure I can pay about $2,000 a month toward them... starting in May.

Will this affect my score more than minimally? Or would it be better to just pay the minimum and use the cash for investments?

Re: How much will paying on student loans help?

MarineVietVet — Tue, 01 Mar 2011 23:06:20 GMT

@Anonymous wrote:
So, I owe (don't gag, spit your food, or otherwise, have a stroke - I've done all of them); $113,000 (I was in school for MBA, Law, and now pre-med).

Anyway, I figure I can pay about $2,000 a month toward them... starting in May.

Will this affect my score more than minimally? Or would it be better to just pay the minimum and use the cash for investments?

You'll get different opinions about this and I'll give you mine.

I am of the view that any debt should be paid off as fast as possible as long as you have enough savings in place for emergencies. Being debt free is always my #1 goal.

As far as your score it will have minimal effect because installment loan utilization is a very small part of scoring.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: How much will paying on student loans help?

Anonymous — Tue, 01 Mar 2011 23:11:13 GMT

Thank you! That's what I was thinking. I could pay the $1000 per month, invest the other $1000 into a portfolio.

I'm about both right now - paying down debt but more, about getting my score back to 780.

Re: How much will paying on student loans help?

Tazman81 — Wed, 02 Mar 2011 14:50:28 GMT

I agree with Marine. Though it will likely have a minimal difference in your FICO, you probably want to get it paid off sooner rather than later. That way you don't have it hanging over your head. I would get your emergency fund set up, and then start paying the rest toward your debt as depending on your investments, there is no guarantee that you will "gain" more money then you are paying in interest on your loans.