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Consolidating Student Loans

Established Member

Consolidating Student Loans

I have a question about consolidating student loans through the Federal Direct Education program. Will this help my credit scores? Right now I have five individual loans all in deferment and in good standing totalling about 48K. The analyses of my cr on the various monitoring/reporting services say that the # of loans is hurting my credit score. I'd like to consolidate 4 of the 5 loans (one I'll lose benefits for if I consolidate) into a single loan of about 38K. I'll get lower interest rates, and reduce the number of loans reported from 5 to 2. I checked with gov agency, and the consolidated loan would be reported to all 3 CAs. I am working hard to rebuild/re-establish my credit and want to make sure I maximize any benefit to my CR that I can. Thanks in advance!
Message 1 of 2
Regular Contributor

Re: Consolidating Student Loans

I'd be more worried about saving hundreds (probably thousands if you have $38k loan) of dollars in interest rates than bumping my FICO score. From what I can tell in your message, you'll be saving money in the long run, money that you can use to pay other debts if you have any and with time, your scores will go up.
For age and want, save while you may; no morning sun lasts a whole day.
--Benjamin Franklin
Message 2 of 2