Would it hurt my credit score to pay off my $12,000 in student loans all at once?

Answers:1   |   LastUpdateAt:2012-11-02 17:17:01  

Question
Sherri Mcgovern
Asked at 2012-08-18 15:33:03
Does it hurt my credit score to pay my $ 12,000 in student loans at once?
I have about $ 15,000 in the bank. I've been interested in buying a house sometime in the near future. Since I have the money in the bank to pay the student loan, I do this? Would it be bad or good? I am currently paying $ 250 per month in student loan. I have 26 years old and earn about $ 80,000 ( before taxes) , living at home, paying $ 400 per month in rent.
Answer1mustafaAnswered at 2012-11-02 17:16:30
It can be a good thing to reduce your debt load.
But, depending on the interest rate on the student loans, I'd increase my payments, without totally paying them off.
I'd suggest putting an extra thousand or so as additional principal payment on the student loans now, and SAVING like crazy.
The MORE you put down, the better your chance of loan approval. Putting down 20% avoids extra costs of PMI and increases your chances of loan approval. If your debt load is too high, you can pay off your student loans. The MORE you put as down payment, the larger your equity in your home, and the LESS you pay in interest over the life of the loan.
Related Questions
1
  • Answer This Question:Would it hurt my credit score to pay off my $12,000 in student loans all at once?