What should I do about my SL?

[twnkltoz]

My DH and I are paying off as much of our current debt as possible to get a boost in our score and reduce our montly payments in preparation for buying a house. My student loan is in decent shape: the last time I was late was March 2006, the original loan amount was $4600 and I now owe $2600. Would I be best off paying the whole thing (IF there's enough funds), or at least paying it down below 50%...or will it even make any difference? Should I save the money for other things and just keep making the payments on time?

[ziggypop]

My DH and I are paying off as much of our current debt as possible to get a boost in our score and reduce our montly payments in preparation for buying a house. My student loan is in decent shape: the last time I was late was March 2006, the original loan amount was $4600 and I now owe $2600. Would I be best off paying the whole thing (IF there's enough funds), or at least paying it down below 50%...or will it even make any difference? Should I save the money for other things and just keep making the payments on time?

 

As far as whether or not you continue with the loan through payments or pay the whole thing off, there's not too much of an effect on your score from installment loans (assuming it's not the only thing on your report), so it's really up to what works best for your total financial picture. I certainly wouldn't recommend paying minimums on CC debt or other types of debt or making yourselves miserable to scrape together the money to pay it off completely, though. As far as paying it below 50%, that is completely irrelevant. That's only the case for revolving debt (CCs, etc.). There is no "credit limit" here, so whether you've paid off 90% of it or 10% of it doesn't matter at all as far as your score is concerned.

 

Hope this helps!! Good luck with the house!

[twnkltoz]

Thanks! I think I'll leave it alone--it's only $53/month.