Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Student Loans
Profile Image

Question By
Scubagal3060

0 Contributions
0 People Helped
Refinancing Student Loan?
My student loans are split into five different amounts. The two smallest are the smallest interest rate (3.6%) and the largest three are the highest interest (6.6%). Where should I look to consolidate/refi these at a lower interest rate. I would love to pay them off asap, but looking for lower interest versus longer term or less monthly amount.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
14 Contributions
170 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

I had seven accounts when I entered repayment, ranging 3.5% to 5.5% and $1000 to $7000.  I found it better to pick them off one at a time, versus consolidation which locks you into one larger payment and usually for a longer term.  There is no one obvious way to pay them off that works all the time for everyone.  You might attack the highest interest loans first.  You might pay off the lowest balance ones first.  Paying off the higher interest ones first will save you a couple dollars.  Paying off the lowest balance ones first will make you feel like you got momentum/sense of accomplishment on your side.  All in all, I feel you are in better control by not consolidating.

In my case, I was also recovering from BK7.  So, I also considered the credit implacations.  Carrying the SL debt helped the average age of my accounts post BK7.  Therefore, the best strategy for me was to nearly pay them off each one at a time.  Basically, the stradegy is to attack the highest interest loans first and bring the balances down to, say, $100.  Then move on to the next one, and so on.  Basically, you will keep getting the credit boost, while no monthly payments will be due for many years.  The monthly interest to keep them around is pennies, and each month you will show on time payment for each account even though you have made no actual payment.  Average age of accounts grows, on time payments grow, and your cost is practically nothing to keep this going for years.  This is about the cheapest and easiest credit repair technique there is.  Eventually, my credit recovered and I no longer need them.  Final payoff was quick and easy.  Done.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.