Consolidating student loans affect credit score
If you do not yet have much history as a borrower, a student loan gives you a great opportunity to begin building good credit.
The choices families make to finance a college education can have consequences that last for decades.The lower your score, the higher the risk may be that you will fail to make your payments on time.A high score, on the other hand, usually indicates that you are a reliable and responsible borrower.One of the dilemmas facing people who have large student loan debt is the difficulty in refinancing student debt.They seek to move their existing notes to loans with both lower interest rates and lower monthly payments.A student wishing to borrow a a Grad PLUS loan or a parent wishing to borrow a PLUS loan with adverse credit can borrow as long as they are able to obtain a credit worthy co-signer.
In the PLUS program, a co-signer is referred to as an endorser.
Most students will not meet the minimum income requirements.
However, some students who have established careers and good credit may qualify.
Credit plays an important role in determining eligibility for private student loans, Direct PLUS loans or Direct Grad PLUS Loans.
Direct Subsidized and Unsubsidized loans and Perkins loans are not based on credit, but cannot be obtained if the borrower is in default on another federal student loan or owes a refund on a Title IV grant such as the Pell grant. Direct Student Loans are not based on the student’s credit history or credit-worthiness.
Students who need to utilize private student loans will almost always need a co-signer.