Question


pokerki...

Student Loan Consolidation?

I have almost 9k more in student loans and I'm paying almost 100 a month. This isn't a lot compared to some peoples loans, but when you pay 1k for rent and utilities then an extra 100 hurts the team. Anyways, my question is when you consolidate student loans does this affect your credit score? I have over a 700 rating and if this does affect the rating I'd rather stick to paying 100. Worked too hard to get my credit up and rather not take any unneccessary hits on it. Thanks in advance.

3 years ago - 6 answers

Best Answer

Chosen by Asker

1) It may affect your score A LITTLE BIT if the consolidation company pulls your credit report (a hard inquiry). 2) Why do you care if your score is affected? Do you plan on making a large purchase / getting a large loan in the near future (6mo-1yr)? If not, who cares? 3) If the interest rate on your loan is variable, then generally by consolidating you lock in your interest rate (it becomes fixed instead of variable). It may be good or bad, depending on what your rate is and what you think will happen to interest rates. I think there's also a difference between consolidating while in grace period (the first 6 months after graduation) or later, because I think the interest rate in grace may be lower. Personally I think you should find a cheaper place to live. That is what's really "hurting the team," not some 100/mo.

by teehee

3 years ago

Asker's Rating: 

Other Answers

YES it does affect your credit score. In fact creditors rate student loans as most important. I have the same problem so I asked and its much better just to keep paying the minimum anyways. I hope this helps!

by strawberryice_lb- 3 years ago

Can you consolodate down to 2.67 % ? Find the consolodation people in California ( L A I think) and they can do it......You may save hundreds of $$$

by goodcharacter- 3 years ago

710

by Illeagal Alien- 3 years ago

Don't do that. If you go broke later on, one of your options will be to consolidate and get another 2-year hardship deferral. If you've already consolidated, then you can't use that option, as you can only consolidate once.

by geek49203- 3 years ago

Consolidation would affect your credit score very little (5 points?) if the company takes a hard inquiry against it. Otherwise, it doesn't matter. Since student loans are considered installment loans and creditors like these types the least (b/c you are "locked in" to a certain amount), they do count against your credit score. The best way to maintain your current score is to continue paying them on time. If you're not planning on making any large purchases (car, house, etc.) or take out any additional loans in the near future, then don't be too concerned with the score. It doesn't change drastically unless you do something with it. Most consolidations require you to have a minimum of 10K, so you probably wouldn't qualify anyway. And the rates are pretty competitive to what you are probably paying now based on your score. They may lower your monthly payments, but in the end you will be paying more interest since they usually extend the payment plan out by at least 6 months. If you can manage the $100 now, stick to it and look at your monthly budget to see where you could cut any costs (shopping, dining out, coffee, etc.). Also, once the new year hits, consider using your tax refund (if any) to put towards the loan. Good luck!

by jess_offramp- 3 years ago