To consolidate, debate, or just negate? (Don't ya hate)
October 16, 2007 12:25 PM   Subscribe

Consolidate student loan or would that possibly be bad for my credit?

I’ve read several of the older posts regarding this. I’ve decided that probably the Direct Loans from the Department of Education would be best if I do decide to consolidate.

I have one Stafford loan, one for about 21k that’s at a reasonable interest rate (lower than 5.5, it’s been consolidated), that I’m not really that concerned about, I’m just going to pay it as it goes.

But I have this one loan which is a Private Student Loan with a variable interest rate of 11.25% that I’ve had for about 4 years now. It’s at about 7k, which isn’t bad, but I know I can be doing better. If wasn’t so naïve about bad advice I probably never would have gone that rout. I know it’s my own responsibility, but I never really gave these things an honest look until the last month.

I’m making a decent living out of school and can afford to go right after the loans, but my way of life would change slightly by missing out on a few extra hundred bucks a month.

As for the tax standpoints of paying off the interest, I’ll probably be taken as a dependant (better him than me form a cash standpoint) this year and my interest should be phased out the following.

So should I start a quest to begin to look for better a better rate or just suck it up and stick with what I have? (I would assume to pay as much principle as I can) If I went looking and decided not to, would that mess up my credit score at all?

Thanks in advance.
posted by thetenthstory to Work & Money (2 answers total) 2 users marked this as a favorite
If you can save money by consolidating the loans at a better rate, do it. There's no shame in finding a better deal, and no honor in paying more than you need to.

Shopping for loans shouldn't mess anything up, whether you go through with a plan or not.
posted by Thorzdad at 1:01 PM on October 16, 2007

I consolidated with the Dep of Ed Direct Loan and I have a great credit score--I don't think it made any difference.

The only thing I would have done differently is that I chose a fixed interest rate which was pretty high(7.5%) and then interest rates went down--I knew nothing about interest rates when I consolidated...
posted by beckish at 2:39 PM on October 16, 2007

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