@Anonymous wrote:The reason it's 0% is because of the CARES Act and Covid. Congress put a freeze on student loan interest. I think that ends in September 2020.
What I did, and you will have to play around with the financial calculators, is consolidated all my loans into one, so you only make one payment. Instead of making say 10 different payments to 5 subsidized, 5 unsub. I requested a deferment after I graduated for a year, then I will start paying on my student loans. The hardest part is picking a repayment plan.
Now as far as FICO scores, just pay them regularly and on time.
Just note consolidating will actually form two new loans. Subsidized and unsubsidized cannot be consolidated into one (as I learned), so you will have two. but it means that subsidized loan can go back to 0% interest in the case of deferrals.
@Anonymous wrote:I'm a undergraduate student who's set to graduate next summer, and I currently have a $44k balance in student loans from Nelnet as my loan servicer, with $41,500 as the principal balance & $2,464 in interest. Apparently, 5 of them are subsizied loans that accumulate to $23,332, whereas the 6 unsubsidized loans account for the remaining $20,732. For some strange reason, the interest rates I checked on FAFSA appear to all be 0.00%, but when I check on Nelnet, it shows the actual rates, with 3.75% being the lowest, and 4.66% being the highest. I'm not exactly sure how my due date got moved forward last I checked, but its June 2022 as of this month. My biggest worry for these student loans is that a few of them are my oldest accounts, and I currently don't have a full-time job to make large monthly payments to the loans.
Thankfully, I have a good credit score sitting around 700, along with a few credit cards ($1000 limit for Discover Cashback, $1,500 limit for Paypal Credit, and $2,000 limit on Paypal Mastercard). I have a very low credit utilization rate of 2%, thanks to a $110 balance that's spread across my credit cards. I've searched a bit around these forums and learned that some people undergo different ways of getting rid of debts for loans via loan forgiveness, pushing the due date forward, etc. However, I'm still in the process of building my emergency fund, savings, and setting up a Roth IRA account for retirement. I don' know the game behind paying for the student loans, but is it perhaps better to pay off or pay down the loans upon repayment, given the current situation of my circumstances and my credit file? Any ideas or advice on a way to pay the student loans to increase my credit scores?
I'm not seeing a real advantage to you consolidating these right now. As you correctly discern, the negative of losing the open account ages may likely offset the negative of having multiple accounts with balances. And regardless, multiple student loans with balances don't negatively impact you in the way that multiple revolvers with balances do. My advice is continue to do as you're doing, and pay ahead where possible.
Since you can't afford the total of all of them right now, call Nelnet and ask to switch to an income-based/driven/contingent plan of some sort. I imagine they'll have an option for you. Only if the answer is no should you consider consolidation.
