What should I know before applying for a student loan? Should I pay off all or as much of my CC debit first?
Before taking out a student loan, would it be best to pay off as much of my Credit Card as possible to help get the best APR%?
I have 1 CC with a 00 limit unused. I have another with 00 on a 000 limit. I pay my car loan on time and always make the minimum on my CC payments (still on a 0% APR).
Would having so much on a CC really hurt me when I go to different CUs or Banks looking for a student loan?
Last score I saw was around the 750 range.
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If your credit score is favorable, the outstanding card balance will likely have little or no impact on your interest rate. Student loan debt is almost always classified as non-consumer debt, it's difficult to get student loan debt discharged via bankruptcy, and therefore it's a bit less risky for the lenders. Private lending interest rates will still vary by score, but there's always an upper limit on the benefits of a marginally better score, ie my 805 score doesn't really do anything for me that a 740 wouldn't. Furthermore, paying off early would likely have little impact on your score, according to this equifax article:
Does Paying Off an Installment Loan Early Affect My Credit Score?
Edit: The article references installment loans which are not the same as credit cards, but the impact on credit is similar, except that a paid off credit card is not a closed account.
Federal Direct loans are need-based, so it would make no difference there.
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