Should I take a student loan and repay right away?

[superflunker87@juno.com]

I'm an undergrad college student. I'm thinking of taking a student loan of about $1000-$2000 and paying it off right away to improve my credit score. Is that a good idea? Also what are my options of repayment? Thanks in advance.

[sweeps]

If you're doing it just to build your credit, I would say no it's not a good idea. The reason is the fees you have to pay to initiate the loan. Opening a credit card and making some small purchases that you pay off each month will be just as good, if not better.

The Citibank mtvU card is a very good choice if you can get it.

[PRICEPLUS]

I concur!

[eisor]

I have the Citibank mtvU card. I love it! I really like the rewards program. I get 5 points back in places that I actually use it the most.

[lsdlsd0]

Originally Posted by superflunker87@juno.com

I'm an undergrad college student. I'm thinking of taking a student loan of about $1000-$2000 and paying it off right away to improve my credit score. Is that a good idea? Also what are my options of repayment? Thanks in advance.

No, you shouldn't. Once you close the account it will be gone from your credit reports. Not to mention the fees (originator fee is usually 3%)

I have several student loans. When running the option of closing these accounts through a "what if calculator" from privacyguard, my credit score would increase by 20-30 points. This leads me to believe that openning installment type of accounts would lower your credit score rather than increase it.

If you want start building your credit, get as many credit cards as you can (or rather higherst credit limit you can), keep your utilization low, no late payments, etc. Don't ever believe the crap that not paying your balance in full will somehow increase your credit score. Credit companies are a separate entity from the 3 credit bureaus for a reason :P

It might be a problem getting your first credit card. Student + department are ussually the easiest ones to get.

MTVU card(5% on restaurant, bookstores, and video related) is great, add Citi Dividend Platinum Select Card for College Students (5% at groceries, gas and drugstores) and you have 5% on almost everything ya need.

BTW, if you have the money to pay tuition right away, see if your school accepts credit cards. Use CC to pay the tuition, get 1% back, and then pay the CC . This way you'll save 1%

[funnyvalentine]

It's not going to help your credit score; it can only hurt it if you default. I have student loans and they are at 2.5%; if you really need the money, this is not a bad way to go.

I have a Citibank Upromise card, and I love it; it rebates into a 529 fund.

c

[astw22]

Hi there, Do you have to take a loan out or can you pay for college without it? The reason why I ask, is because I have $30,000 (had to get student loans) worth of student loans that I am trying to pay off. I chose a career path that didn't work out and now I am paying for it. If you are able to take out the loan and pay it off immediately, then go for it. But remember, things change. I am in Canada and had to start paying back my student loans 6 months after graduation. If I didn't have to take out a loan I would never have. Hope this helps.

[funnyvalentine]

I dont' know what Canada is like, but my experience with the US is that the loan company I'm with is very tolerant if you keep in touch.....

[astw22]

Originally Posted by funnyvalentine

I dont' know what Canada is like, but my experience with the US is that the loan company I'm with is very tolerant if you keep in touch.....

Well that is good they are tolerant. I have to say that in Canada they are pretty good about revising your terms if requested, but regardless they want their money back. Oddly enough, I have 2 loans one through a bank and another through the government, and I have actually found the government to be easier to work with. lol. strange.

[poundwise]

Originally Posted by lsdlsd0

Once you close the account it will be gone from your credit reports.

This isn't true. The account information will remain visible on you credit report for years. Still, the other points in this post are accurate and I concur with this poster and others who say that what you propose is not a good idea.

Get a credit card, use it for certain purchases that you pre-determine only, pay the balance every month.

[Speckman]

Yes, it's a shameless attempt at getting people who will get me some referrals. Facing consolidation of $50,000 in student loans, and being stuck in a dreadful job that is intensely stressful, I can think of a lot of things worse than getting referrals... like giving up my pay and life for the next few years to pay off my student loan. I'm willing to put down $9 and i think many others are too. This is a much simpler alternative IMHO.

[poundwise]

Originally Posted by Speckman

Yes, it's a shameless attempt at getting people who will get me some referrals. Facing consolidation of $50,000 in student loans, and being stuck in a dreadful job that is intensely stressful, I can think of a lot of things worse than getting referrals... like giving up my pay and life for the next few years to pay off my student loan. I'm willing to put down $9 and i think many others are too. This is a much simpler alternative IMHO.

What are you talking about?

[funnyvalentine]

I'm not saying it's wrong; i'm just saying at least be upfront about it. Ethics will go along way in your life and your stressful job. Honesty is a good thing.

Tell your potential referrals exactly what this is; I doubt that anyone would object but most of us are bombarded with offers that aren't really offers, and frankly, I resented it.




QUOTE=Speckman]Yes, it's a shameless attempt at getting people who will get me some referrals. Facing consolidation of $50,000 in student loans, and being stuck in a dreadful job that is intensely stressful, I can think of a lot of things worse than getting referrals... like giving up my pay and life for the next few years to pay off my student loan. I'm willing to put down $9 and i think many others are too. This is a much simpler alternative IMHO.[/quote]

[Speckman]

Well, I do apologize if it was out of line. But you're right. I guess people are willing to give the wino down the street a symphathetic break for being truthful since its for beer. I don't suppose I could make another pitch? :-)

[funnyvalentine]

go for it; i won't bite

[lillyb]

Originally Posted by superflunker87@juno.com

I'm an undergrad college student. I'm thinking of taking a student loan of about $1000-$2000 and paying it off right away to improve my credit score. Is that a good idea? Also what are my options of repayment? Thanks in advance.

I wouldn't.

[Ima saver]

I would not either. What is speckman talking about??

[jmjj215]

Your Score is affected quite a bit by history. Since this wouldn't really help the history much, would cost fees to do so, and would just be an all-around pain, I wouldn't.

[cbmeeks]

Borrowing money is never a good idea...well, almost never. Mortgage being an exception.

Paying off a loan quickly doesn't reall help your credit score....paying payments for a year or more helps. But why would you want to do that?

If you can pay it off quickly, just save the money in ING, earn a tad interest and pay YOUR SELF.

Radical idea huh? Paying yourself instead of a bank?

my $0.02

cbmeeks

[Speckman]

According to Dr Tim Leunig, lecturer in economic history at the LSE, "Nobody pays off their student loan early, unless they are a nutter. Even if you've got the money to pay it off early, you should just put it in a bank and pocket the interest."