I am scheduled to have students loans forgiven under PSLF next March. If it takes 3 months to process, then I'll see $0 balances in June. The amount forgiven will be about $106K. My total debt is around $186K (106K student loans, $45K credit cards, $35K auto). I qualified for the SAVE plan on my student loans so my monthly payment is $0.
Now, once my student loans are forgiven, my total debt will go from $186K to $80K. Disregarding any credit score effects, and assuming the same income, would reducing total debt by $106K increase my chances of obtaining credit cards because I'd really like to find more 0% APR cards to chop away the $45K CC debt that I currently hold. As I see it, losing student loans won't change my revolving cc Util % which is at 32% so would the student loan forgiveness help me?
@pi-r-squared wrote:I am scheduled to have students loans forgiven under PSLF next March. If it takes 3 months to process, then I'll see $0 balances in June. The amount forgiven will be about $106K. My total debt is around $186K (106K student loans, $45K credit cards, $35K auto). I qualified for the SAVE plan on my student loans so my monthly payment is $0.
Now, once my student loans are forgiven, my total debt will go from $186K to $80K. Disregarding any credit score effects, and assuming the same income, would reducing total debt by $106K increase my chances of obtaining credit cards because I'd really like to find more 0% APR cards to chop away the $45K CC debt that I currently hold. As I see it, losing student loans won't change my revolving cc Util % which is at 32% so would the student loan forgiveness help me?
1. Congratulations!
2. Yes I think it will improve your chances of being granted credit since it will reduce your debt to income ratio.
3. It may improve some of your credit scores too, since it will be reducing accounts with balances.
I doubt it will help much.
SLs don't count against you if you have not missed payments.
Wifey had over $200k forgiven and her score did not move 5 points (low 800s).
Congrats though.
Agreed. I had $45K forgiven through PSLF and mine didn't budge an inch.
It is good for your DTI, though and just knowing that you don't have that hanging over your head is a relief too!
