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student loans question

Discussion in 'General Support and Advice' started by Ticklish Fish, Oct 26, 2014.

  1. Ticklish Fish

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    ok so, Im in Texas, US. in case this information is needed.

    I have taken 2 loans from the government for my uni, both are direct subsidized stafford loans.

    I want to ask how does repaying loan affect bank credits and stuff? I am told that it's bad to repay too early, and i vaguely read some articles on them.

    i have 2 loans, one is 5500 at 3.86%, and the other is 3500 at 3.4%. I had borrowed the $3500 one first. I have thought about repaying the $5500 first, then maybe repay the other one slowly. Or at least that's my ideal idea on how to repay the loans. Is it a good idea?
     
  2. Argentwing

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    Have you talked with your financial aid person about this? It is sort of "bad" to repay too early because they want to see you can make regular payments. However, the plan you have to pay off the first and work on the other sounds like a good one.
     
  3. Ticklish Fish

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    um, not really. i mean i can check my loan borrowed online and make payment there, but to talk about things like, if i can repay one super fast first. no, i havent talk about it.
     
  4. ForeverYoung000

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    Federal student loans are real loans and must be repaid. Have you thought of having money left over? It's pretty important to consider leading it to down payment. Also, You have a choice of several repayment plans that are designed to meet your needs. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose. Get details about repayment plans and calculate your estimated repayment amount under each of the different plans.
     
  5. Ticklish Fish

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    i might have extra money leftover from my financial aids, and im thinking of repaying some loans with them.

    but is it good idea to repay a loan say, way earlier than i had selected the repayment plan? (let's say I picked 10 years but i repaid in 5 because frugal life saving)
     
  6. Jwis

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    The only 'bad' part of repaying a loan early is missing out on the opportunity to have a record of on time payments. This is the largest factor contributing to your credit score (discounting bankruptcy). There are no prepayment penalties for any federal student loans.

    How is the rest of your credit history? What is your longest open line of credit? Do you have credit cards? What is your debt to limit ratio on them? These are all important factors in determining your credit worthiness. Generally it is a good thing to pay of a loan early you are saving money on interest payments.

    I am in the process of repaying my student loans early. I pay about 150% each month on them.