I have a somewhat unique situation. I currently could pay for college in all cash (like I have been doing for the past 4 years), but now in my senior year I finally have gotten wise to apply for some aid. I have been offered 5K in sub'd fed loans. I am thinking about excepting these loans as basicly a 0% interest loan for 9-12 months (depending on the semester). However, I was wondering how I could pay these loans back and gain credit score; maybe sending a monthly payment while I am in college to show payments on my report then PIF as soon as the no interest runs out (deferment until 6 months after graduation).
Anyone have any experience with this? Anyone can list the pros and con's to taking this loan?
I have no installments currently. I do however have a discover card that I have carried a balance on for the past 10 months, and I just opened a BoA card that I will be making payments on for the next 12 months. Both cards were 0% interest offers so I never PIF'd. Other then that I have no other credit (besides pulls from my Apartment complex, Verizon Wireless)
As a general rule, don't take out student loans you don't absolutely need while in school. Credit takes time and you probably won't get as much out of starting student loans as you would with a credit account.
If you need a new laptop or something for school, and qualify for financing through a computer vendor, just finance through one of those comanies and pay that off gradually as you go through classes. That way your credit will build.
Student loans won't go to payback and affect your credit positively until after you graduate. Follow?
That makes sense, I guess I will just use it as free money. Worse case scenario is I make $100 (3% interest for 9 months of 5K). I dont need the money at all, I have the cash in hand........but I was always told why use your money when you can use the banks money.