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Posted in Student Loans
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Question By
Nadalo

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To avoid interest, should I pay my student loans early or in installments?
I have $19,000 left to pay on my student loans. This account is negative because I missed many payments in the past. But, for the past 2 years I have been paying in full, on time. I now can afford to pay it off entirely and would like to, in order to avoid the huge interest. However, I know it's better to keep a credit history going. Will it be a big hit to my credit score if I pay it off at once versus paying the rest over another year or so? Also, I don't have any other loans or credit cards. I plan on getting a secured credit card very soon (the only kind they will give me right now). Thank you!

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Got the total balance? Pay it off!!

Those student loans will be a negative for a while due to the missed payments of the past.  If you have the money to pay off the entire balance at once, go for it!!  It will save a lot of interest cost and save you money in the long run.  Just make sure what the payoff balance is before making the big payment so you and the financial institution are on the same page.  The total payment will reflect favorably on your credit report and these loans will remain a part of your credit history for at least the next 10 years.

Getting a secured card is a good idea as another credit building tool.  See what is offered here and what is recommended for you and choose wisely.  Paying all accounts in full as quickly as possible is a good practice to continue.

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