Private College Student Loan

Student loans effecting credit?

When I checked my credit report today, I saw that Nelnet was reporting my student loans for every disbursement they gave me. In other words, instead of it reflecting one loan with Nelnet (and the balance increasing as I borrow additional money), it reflects 6 seperate loans - even though it is only one account. It is one loan per disbursement. I am concerned that this may effect my credit rating. Even though I am not obligated to pay the loan until 6 months after my education is complete, their only suggestion was to pay down each disbursement in full or to consolidate my loans. I am not sure what to do. I don't really have the money to pay it back just yet and I am afraid that after a few years of schooling, it will show 18 seperate disbursements. Won't that look bad, having 18 seperate loans??? Any ideas would be appreciated! Also, Nelnet doesn't consolidate so I a not sure who to go with. I don't have good credit.

Public Comments

1. Any student loan company will show it that way, because each loan is technically separate--you just have one master promissory note. It won't affect your credit any differently to have several small student loans through the same company than it would to have one large one, as long as you pay them when they are due. It's usually best, but not required, to consolidate them after graduation.
2. Okay, I can help you. Hubby used to work for one of the big 3 credit bureaus. First. Yes, each time you get a disbursement it will come up as a separate loan this is the way its reported. Yours, mine, everyone's. Each IS a separate loan and by the time you graduate each will likely have different rates, terms and payoff amounts. Second. Nelnet (or any lender for that matter) is not a credit bureau so don't take advise from them regarding your credit and understanding your report. Work directly with the credit bureau. Folks don't realize that ANY and ALL credit activity stays on your report for seven years or more. Consolidating, student loans being sold to another company, taking out new loans... all of these things are ADDED to your report. The old ones don't go away. They are just listed as transferred or whatever. Example: I had 9 loans when I graduated. The loans were sold shortly afterwards and the old 9 loans were listed with 9 duplicates of the same loan with the new company underneath. 18 total entries for student loans. Don't consolidate. It won't do you any good... especially right now. You can only consolidate ONCE and if you do it before you even graduate, it kind of defeats the purpose. Again, don't do it. This is a new and "much hyped" way to get even MORE of your money. Sure your payments may be a few dollars less, but instead of paying for the next 10 years, you'll be paying for the next 30.. giving them more money in the long run. Your loans are already with the same lender, so you'll only be making one payment anyway... and you can't consolidate federal loans with private loans if you have both. So you'll wind up with two payments instead of one. After consolidation, you will also loose many federal benefits of consolidation such as mandatory forbearance and forgiveness policies. The best thing you can to do right now help your credit score and your student loans is to understand that you MUST graduate from college. You MUST find a job within 6 months of graduating. And you MUST limit your borrowing to no more than what your starting salary will be your first year out of college. You MUST stay away from credit cards at all costs. And you MUST have a good time in college. :-) Good luck. Hope it helps.
3. Wow, Found-1 with a huge reply. Great stuff too. I'll try not to beat the dead horse. :-) I would not worry about there being so many different entries on your credit report. This is normal for all college students taking out federal loans. The loan company is required to report the loans in this manner, per federal education requirements. What is more important is that you not be late with payments, or let your payments slide. Take advantage of using forbearance and deferment options if you are having trouble making payments starting out. Don't be afraid to talk to your lender/servicer when you are having money issues - they are there to help, but can only do that when you talk to them. Federal loan consolidations are now only truly helpful if you have variable rate Stafford loans that you want to take advantage of capturing a lower fixed interest rate. This will be possible after July 1st of this year - if you have any variable rate Stafford loans. The bad part is that right now practically only the fed govt's Direct Lending program is doing consolidations - so any loans you consolidate you would have to do through them, thus adding another lender to pay. And I know Found-1 is fond of advising against extending your overall repayment period, but it is useful to do so starting out so that you can get a lower monthly payment. Eventually though you will want to start paying more so you can pay them off sooner. You will pay FAR more overall if you wait the full 25-30 years to pay off a loan. Don't do that if you can avoid it, but lowering your federal loan monthly payment can free up money to put toward private loans (if you have them). Debt stacking, paying off higher interest rate loans first is a good strategy at repayment. Good luck!