Article Score0

I have 4 student loans 3 of which are around $ 790 and one that is about $ 1800. I want to pay one or more off and want to know whether I’d be better off paying off the larger loan or two smaller ones. They all have the same 5.6% interest rate so that doesn’t affect it too much.

2 Thoughts on Which might raise my credit score faster?
  1. Reply
    CRE
    March 20, 2013 at 4:04 pm

    This question couldn’t be accurately answered based on the information given. There are many other factors that would need to be known in this situation. Ideally for an installment loan you want to have at least 20% equity in the loan reporting on your credit to help to maximize your credit. Based on the information provided you want to do what is going be best for you financially as either direction is not going to have a significant impact over the other.

  2. Reply
    SumDude
    March 20, 2013 at 4:13 pm

    Credit score is a function of meeting your obligations over time; not how fast you can pay off your debt (< although that is a good habit to have). Just in terms of reducing debt, pay off 2 smaller ones and get free of 2 pieces of paper every month. Actually, you are better off paying only slightly above minimum so that you have some operating cash. { 5.6% on a debt is much cheaper than 18% on a credit card, should a major expense appear - like car repairs. } when you have a cushion of cash, then accelerate paying off your loans. ^^ You are buying time, and 5.6% is a reasonable price.

    Leave a reply

    Register New Account
    Reset Password