Thursday, November 01, 2007

Private Loan Consolidation…

I am thinking about private loan consolidation. My private loans are all variable and the highest interest rate is 9.37%. I may be able to qualify for a lower fixed rate and extend my repayment term from 20 years to 30 years. It’s worth exploring.

Citibank looks like they have the most attractive offer right now. The rate on the loan will of course depend on my FICO score and I haven’t pulled my credit report in almost a year. I think that I am going to pull it through and just pay the extra fee to get my scores. Before, all of my scores were over 700 but not over 760. All my credit commitments have been handled as agreed and with paying down the balance on my credit card, my balance is now only 45% of the credit limit. That should help my credit score.

I am not sure how my credit score will get impacted by cancelling my AMEX rewards card but it did not have a set limit so I don’t think it will harm me too much. I am also unsure how AT&T Universal/Citibank cancelling my card will affect my score. I hope that it doesn’t harm it because it’s not like I didn’t pay on time. I just didn’t use the card for 4 years. We’ll see.

I am going to wait until later this month or December to check my credit report/score just to ensure that the cancellations are reflected and to allow time for my paydown on my credit card to be accurately reflected.


Anonymous said...

I'd suggest holding off on that idea. The 2007 College Cost Reduction Act forces the interest rate on federally subsidized loans to decrease by 50% over the next five years. Unless you can get a locked in 5% rate or a fantastic incentive to consolidate, I think you might do well to reconsider.

Also, I love you blog. It's nice to see a fellow Chicagoan in the PF Blogosphere!


Anonymous said...

Ack! I misread your post! I thought you meant FEDERAL loans. my mistake!

Chitown said... problem.

I'm not consolidating my federal loans any further at this time. My first three years are consolidated at 3.5%. I didn't consolidate my federal loans from my fourth and final year of law school. They are currently at 6.8% for the stafford and 8.5% fixed for the grad plus.

PiggyBankBlues said...

i think the amex rewards card uses whatever the highest balance you've carried as your credit limit. it matters more how long you've had the amex. but really, a credit score's recipe is some deep dark secret.

raj- that's cool info, thanks!