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Posted in Student Loans
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Question By
Khevin

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Student Loan - Effect of making voluntary payments when $0 pymt required?
I have old student loans that defaulted but have rehabilitated. No longer reporting default. Current loan status is in good standing with $0 IBR payments. The amount from these loans in my credit history shows no change while I remain in this status.

At present I already get 'no missed payments' and the benefit of added accounts and older age of credit history with no negative reports -- all of this is good.

What effect on my credit score would there be to begin small payments though not required to? Is there a benefit from showing that current payments are not $0? Is there a benefit from showing a decrease in total due even if a rather small change? Thanks

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Careful you don't open a new

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Can of worms!

You might do a little research first.  See if you can find out if your status would change if you start making payuments. Making payments may also trigger interest so be careful.  

If the total amounts are smaller, I'd try and save up the total balance due and make a lump sum payment and pay it off all at once. 

Good luck

Reply by
Khevin

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EddyTX,

You may be right about triggering interest or other change in status when I'm in IBR status.  They'll allow you to agree to make payments--maybe with no negative impact - I'll check more closely.  You can specify all you want but you can't request that these extra payments go to principal --  they must by law apply to outstanding fees and interest first.

The benefit I'm fishing for is a way to boost credit score.  I've got the other positives from rehab status in my report.  I want to determine if 'payment'  vs  '$O but-good-standing' can give me any boost.  Also, I'm concerned about having $10K debt amount remaining static on my history.

Thanks for any further advice on this anyone.

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