Current Balance Higher Than Original Principle

[Anonymous]

Hello,

I have a student loan that was in deferement for a while.  The interest has now pushed the current balance to about $385 above the original principle.  The original principle is listed as the "High Credit" on my Equifax report. 

In 1-2 months I would like to apply for a personal loan.  I am making on time payments, but should I bring the balance below the original principle before applying for the personal loan?  Would it make a difference on approval or an interest rate on the loan?

Thank you.

[Anonymous]

I have this same problem except mine is about 1200 over original balance it is the only potentially negative thing on my report it was never late and aged 7 years I have a Cap1 secured aged 5+ years wanted to get a better unsecured card and got declined by amex, usbank, and possibly huntington voice. I have 722 fico8 from experian and over 700 fakos from the other 2. I was able to get quiksilver from cap1 possibly from the long relationship but they gave me the same 500 cl as the secured card no collections, no lates, and only 4 inquiries per bureau.

[Anonymous]

Since I am asking about applying for a personal loan, should I repost these questions in "General Credit" or "Personal Finance"?

[pizza1]

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@Anonymous wrote:

Hello,

I have a student loan that was in deferement for a while.  The interest has now pushed the current balance to about $385 above the original principle.  The original principle is listed as the "High Credit" on my Equifax report. 

In 1-2 months I would like to apply for a personal loan.  I am making on time payments, but should I bring the balance below the original principle before applying for the personal loan?  Would it make a difference on approval or an interest rate on the loan?

Thank you.

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I would try to get the balance down below the original principal before applying, and wait till your reports reflect it as well. I had a SL in deferrment for several years, and then in 2012 started re-payment again,  then all that interest compounded and sent my balance way over as well. I just recently within the last year, finally got below the prinicpal by a few thousand. 

[Anonymous]

Thank you to you both for your replies.

I have scheduled a payment of $450 for tomorrow.  The credit card's APR is MUCH higher, but this will get my current balance below the original principle.

Thank you again.

[Anonymous]

ZZWW2017:
You mentioned your credit card's APR...are you planning on putting it on a credit card? Make sure that you keep your utilization ideal (I believe it's less than 8%) or it could hurt your score. Having a balance on a student loan actually isn't that big of a deal; you can still get higher credit scores with it because of how student loans are weighted. Have you tried the AZEO method? This is potentially an easy way to give your score a bump depending on how many cards you have and what your balances are currently.

[Anonymous]

Sabii,

Thank you for the reply.

No, I did not put the payment on my credit card; I had Navient pull the money directly from my bank.

My utilization is high, around 54%.  I am going to apply for the personal loan next month in order to pay on the credit card.  I plan on doing a balance transfer from this card to another card (4% fee and 4.9% APR).  At that point both cards will be around 47%, but both will definitely be below 48.9%.

I will apply for a 12 month loan, but I should be able to pay it back in 9 months.

Yes, I have heard of the AZEO method, and I plan on doing that as soon as I am credit card debt free.

Thank you again for your reply and the information.

[Anonymous]

Sounds like a solid plan! Good luck and happy that you will have that weight off your shoulders.

[Anonymous]

Thanks! 

Even though it is not yet paid off, it feels so good to have some of it paid off.  I'll log into the app for my credit card and look at how much lower it is.  I also look at my previous statements and think about how much less I am paying in interest now. 

It feels so good!