Should I take a student loan and repay right away?

[lillyb]

Re: Should I take a student loan and repay right away?

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]

Re: Should I take a student loan and repay right away?

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

[jmjj215]

Re: Should I take a student loan and repay right away?

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]

Re: Should I take a student loan and repay right away?

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]

Re: Should I take a student loan and repay right away?

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."

[MarianneJ]

Re: Should I take a student loan and repay right away?

Speckman. that would be great advice if you could actually make more interest than the rate you will have to pay on the student loan. Right now that is not the case.

[Graduatedstuden]

student loan consolidation resources and site

Hi,

I have recently graduated May 2006 and immediately searched out various consolidation companies to get an incentive to consolidate my student loans while they are in a grace period. At first I had no clue how to start or how to evaluate different companies. I have come across some good resources like www.students.gov and www.ed.gov. My consolidation just got completed and in all it took about 2 months. These resources will also help answer with any legal questions about federal student loans.

Thanks!

[monamona]

Re: Should I take a student loan and repay right away?

For students without huge income, I suggest starting out with friendly cards like the one found here.

http://1applyforcreditcardonline.com/2006/10/16/best-credit-card-for-college-student/

[beeblebrox]

Re: Should I take a student loan and repay right away?

See, I'm just as confused with my student loans too. I was paying the minimum payment when I started for over a year. Since I got a job, I've been able to pay more of it off still slowly. I do still save money each month from my paychecks. I've been told that student loans really don't help or hurt your credit score unless you're not paying them off. I just got a credit card and have been very careful with it. I don't want my student loan debt hanging over my head for many many more years because I want to buy a condo and want positive net worth.

[SavedintheCity]

Re: Should I take a student loan and repay right away?

NO WAY! In addition to what everyone else has mentioned (high fees) student loans are non-dischargeable in bankruptcy, that means you have to pay them after bankruptcy. In most situations credit card debt disappears after bankruptcy (although Congress recently amended the rules so that super high cc debt sometimes is not dischargeable in full under what's called a Chapter 7 Liquidation).

Not to say that you are planning to go into bankruptcy anytime soon, but it's also another thing to be aware of; you never know what the future brings, plan ahead.

[instantinfo4you]

Re: Should I take a student loan and repay right away?

I agree with what is being said. You shouldn't take on more debt simply to get a better credit rating. What would happen if you had some emergency, and for some unknown reason couldn't pay off this debt. The interest would begin to snow-ball, and this could very easily get out of hand. Just get a cc, and be very careful.