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Couple questions about student loans and credit

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    Couple questions about student loans and credit


    Hello, my name is Jessica, I am 25 now and will be finishing school now..

    Couple questions about student loans and credit.

    So, do they affect the credit score?

    I don't have any job right now, and I am constantly looking, how much time will I have to start paying them off?

    I will have around $40,000 total of debt and just want to see how it will affect my credit because I plan on buying a home in the next 3 years.

    Do student loans will hurt my credit?

    Will I need to hire a a credit repair company so I have a score of 700 at least?

    Lets say I find a job at 80k, how much should I pay them off?

    Not sure what the interest is.

    Anyway, thanks! and I hope I am in the right category!
    Last edited by jesscageorger; 09-17-2018, 07:59 PM.

    #2
    Student loans affect your debt to income ratio which in turn will have an affect on your score. But, as long as you make the payments you shouldn't have an issue.
    Typically, repayment will begin 6 months after graduating..
    How much you pay extra depends on what else is going on with your budget. You'll have to list all expenses and incomes to get an answer to that question.
    Brian

    Comment


      #3

      Congratulation on completing your degree, that's a huge accomplishment and a life challenge milestone. I'm presuming you're currently job seeking and wish you best of luck in finding the job that allows you to work in your field. Meanwhile, it's in your interest to find and review your student loan or at very least be in touch with the holder of the loan to learn details, understand what you signed on for, interest rate, sum and date of first payment and payment going forward for how many years. It's important for you to stay up-to-date on interest rates and any opportunity to apply for lower rates. The most important fact of student loans is that the sum you owe will affect every financial decision you make going forward. There is no avoidance, no forgiveness, no escape, not even discharged in bankruptcy. The longer you pay the higher the amount you will pay in interest and service charges.

      Perhaps, after you get a job and settled into routine, we can be helpful in making suggestions for allowcating cash flow to help you amass the sum needed to fulfil your desire to buy your 1st home.

      FICO doesn't release exact details of their scoring but published guess is:

      - 35% payment history
      - 30% outstanding debt/utilization ratio
      - 15% length of credit history
      - 10% new credit
      - 10% types of credit


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      Comment


        #4
        Whatever you do, don't ever talk to a "credit repair company" -- they tend to do nothing but wring money out of you, and get you into debt.

        Focus on moving forward. Get yourself a good job, and your first order of business is the get yourself out of debt. If/when you land an $80k/yr job, keep living like a college student for the first year, and pay off your student loans in that year. If you have any other debts, knock them out too. From there, you can leverage your income and save aggressively for retirement, a home downpayment, and any other future goals that you may have.
        "Praestantia per minutus" ... "Acta non verba"

        Comment


          #5
          Hi Jessica. Welcome to the site and congrats on finishing school.

          I think you're getting a little ahead of yourself.

          You need to do a couple of things.
          1. Get a job. Once you do and see how much you are actually taking home each month, then you can sit down and plan your budget.
          2. Figure out how much you owe in student loans (and any other debt if there is any like credit cards or car loans), the interest rate, and the repayment terms. All of that information should be on the loan documents that you signed when you took out the loans.

          Why the rush to buy a home in 3 years? Until you are established in your job, have knocked out a good chunk of your debt, and have saved up both a 20% down payment and a 6-month emergency fund, you aren't ready to buy. You also want to be reasonably sure that you will be staying in the same place for 5-10 years minimum. What if you switch jobs? What if you get married? Think long and hard about buying at 27 or 28 when something might happen that results in you selling a couple of years later.

          Forget about "credit repair". There's never a reason to pay someone to do what you can do yourself for free. Pay all of your bills in full and on time every month and your credit score should be just fine. You mention getting it to at least 700. What is it now? And if it is low, why is that? What happened to drop it down that far? My daughter is 23, recently graduated college, and has student loans, and her score is right around 800.

          Post more details of your situation, and update once you get a job, and we'll be happy to help you along the way.
          Steve

          * Despite the high cost of living, it remains very popular.
          * Why should I pay for my daughter's education when she already knows everything?
          * There are no shortcuts to anywhere worth going.

          Comment


            #6
            Originally posted by disneysteve View Post
            Hi Jessica. Welcome to the site and congrats on finishing school.

            I think you're getting a little ahead of yourself.

            You need to do a couple of things.
            1. Get a job. Once you do and see how much you are actually taking home each month, then you can sit down and plan your budget.
            2. Figure out how much you owe in student loans (and any other debt if there is any like credit cards or car loans), the interest rate, and the repayment terms. All of that information should be on the loan documents that you signed when you took out the loans.

            Why the rush to buy a home in 3 years? Until you are established in your job, have knocked out a good chunk of your debt, and have saved up both a 20% down payment and a 6-month emergency fund, you aren't ready to buy. You also want to be reasonably sure that you will be staying in the same place for 5-10 years minimum. What if you switch jobs? What if you get married? Think long and hard about buying at 27 or 28 when something might happen that results in you selling a couple of years later.

            Forget about "credit repair". There's never a reason to pay someone to do what you can do yourself for free. Pay all of your bills in full and on time every month and your credit score should be just fine. You mention getting it to at least 700. What is it now? And if it is low, why is that? What happened to drop it down that far? My daughter is 23, recently graduated college, and has student loans, and her score is right around 800.

            Post more details of your situation, and update once you get a job, and we'll be happy to help you along the way.
            Hopefully will get job before X-Mas..
            Thank you very much for your Reply.Hope will follow your Advice.

            Comment

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