Do lenders view student loans just as they do other debt such as credit cards?

Question

Basically my question is this: In a lenders eyes and for credit reporting/scoring purposes, are all loans viewed equally? Other than the commonly lower interest rates on student loans, is there any reason more attention should be given to credit cards and other loans when constructing a debt-reduction program? What are the pros and cons?

Some people seem to missing the point of my question (Hope). My credit is fine though I do have student loans for my undergrad and graduate education. I pay ALL of my bills ON TIME. I know lenders look at a debt-to-available credit ratio. I also know this is a variable in the formula they use to calculate your credit score. Because often times student loans are a necessary evil whereas credit cards aren't, is there any difference in how their viewed for those purposes.

Answer 1

If you are trying to consolidate, a potential lender is going to be more interested in your payment history and in the number of accounts you have rather than whether it is credit card or student loan debt. They also look to see if you are just carrying balances and paying the minimum each month or if you are cutting the actual debt by paying down the principle owed.

Credit card interest is usually a lot higher than student loan interest and therefore, paying cards off first and getting yourself a lower rate on your outstanding debt is a really good idea - it can save you thousands of dollars depending on your balances. Also, credit card companies don't like to give you deferment, forbearance or alternative payment plans which is another good reason to take care of them first.

Student loan lenders are often easier to deal with as long as you don't get behind in payments. They will grant forbearance or deferment and can offer graduated payment plans or reduced payments for a time. But be careful if you have to ask for forbearance or deferment on your student loan. They can capitalize the interest accrued during the forbearance (meaning that amount of interest gets added to the principle of your loan and you then pay interest on it).
If you require forbearance, try to make at least a small payment each month. It will cut down on the amount capitalized at the end.

Whatever you decide, good luck. You are going about this in the right way and it will only help your credit later on when applying for a mortgage or car loan.

Answer 2

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Answer 3

Would you loan money to your best friend that have a bad credit, never pay his/her own bills, couldn't be trust with money, and never pay any money back to you after he/she borrowed? If the answer is No!! then the lenders would feel the same. The answer is yes, they will check and view student before they will loan the money to.

Additional answer:
I am so sorry that I was missing the point of your question, and didn't give you the best answer you needed. Hope you still find a good answer you needed from someone here.

Answer 4

You must have private student loans because normally unless you default they do not appear on your credit report. You should be happy you are not being approved as the lenders are reconizing you are in deep debt. The situation will not change for the better till you are making more money. Stop applying as you are hurting your credit applying for at least one year and your debt income ration is below 20% even then with student loans till the ration is 10% or less it will be tough

Answer 5

Students loans are viewed like other loans until you don't pay them back or try to get them dismissed in bankruptcy. The debt from student loans if unpaid usually triples with unpaid fees, the interest will go up, and other fees will be tacked onto it.
There are only two ways you can discharge student debt-well maybe three. You either have to die, be declared disabled at 100%, or take a teaching or nursing job in a rural area for 7-10 years.
It's awful, and the rules need to be changed.

Answer 6

When consolitating bills, I will talk people out of trying to include student loans because the interest rate is so low and the payment is so low. It just does not make sense to do. Other than consolidating, student loans are looked just like any other debt.

Answer 7

Since student loans will not go away like a CC debt can, then I would think they carry more of a liability to getting further credit that the CC's.

Answer 8

I think it depends on what type of loan you apply for. In my business, auto finance, my lenders do not take student loans near as seriously as credit cards and installment credit lines.

As a matter of fact, they do not even count them as open lines of credit.

Answer 9

Unpaid medical bills generally carry less weight than other credit does. Aside from that, most other forms of credit carry a relative equal weight in determining your creditworthiness.

Answer 10

Try visit "http://www.debtsawareness.com" . It's a portal to understand about debts, loans and bankruptcy. It may helps