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SallieMae student loan - minimum payment
I have a salliemae student loan and i've been given the option of paying the minimum payment for 25 years and after the government will forgive me of whatever balance is left. Or i can pay it off in 5 years but take a big hit to my wallet. Does it hurt my credit to have a large outstanding loan balance, even if i make the minimum payments? Or is it better to take the hit in my wallet and pay it off as soon as possible?

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Making payments on a loan (whether minimum payments or higher) is one of the most important factors in calculating a credit score--so the more payments you make over time, the more your score will go up. Also, having older accounts (longer average age of credit) increases your score. Installment loans (e.g., mortgages, car or student loans) are not are not factored into your credit utilization ratio like revolving lines of credit (i.e., credit cards, where maintaining a low balance compared to the total available credit line for that card will increase your score), so having a relatively high balance on the student loan for a longer period of time will not decrease your credit score.

When applying for credit, creditors look not just at your credit score but also at your debt-to-income (DTI) ratio. Maintaining a higher balance on the student loan should not negatively affect your DTI calculations, however, as only the mimimum monthly payment is factored into that calculation, even if you pay significantly more on the loan each month (your credit report will show the initial balance, remaining balance and minimum monthly payment on the student loan; a creditor has no way of knowing if you pay more on the loan each month unless you volunteer this information). So unless your DTI ratio is already "too high" (usually "too high" is a ratio above 0.40) when you factor in your student loan minimum payments, your ability to obtain credit should not be negatively affected by making the minimum payments over a longer period of time.

If your DTI ratio is too high with the student loan minimum payment and you have trouble obtaining credit, it might be worth it to pay the student loan off sooner--although then you're sacrificing some of the benefits to your credit score discussed above (longer average age of credit, greater number of on-time monthly payments), so it becomes a little more of a balancing act between the pluses & minuses of paying off the loan earlier.

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Your advice here relates to my question.  Could you look at my question please. Thanks.

Student Loan - Effect of making voluntary payments when $0 pymt required?

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As you pay down the loan amount every month it will help your credit.  I would not pay it off early, there really is no advantage to doing so with regards to your credit score.

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