Does consolidating student loans hurt your credit searc dating
And while student loans are almost always considered “good debt” that can pay for themselves many times over, this is the moment where fortunes are made and lost.This is the moment where you decide what kind of life you truly want to have – a lifetime of debt, or one where it’s easier to start a family, buy your first home, and move on with your life.With so many borrowers still in deferment, it makes you wonder, “How long will it take for many of these borrowers to pay off their loans for good?” According to the Consumer Financial Protection Bureau, the standard repayment schedule for federal student loans is 120 months, or 10 years.Most banks only allow a total debt-to-income ratio of around 43%, meaning your monthly payments for all debts combined must equal less than 43% of your gross income.This is where student loan debt makes things much harder; not only does it chip away at your ability to borrow for a new home purchase, it also eats up funds you could use for a down payment.According to a recent study from the Federal Reserve Bank of New York, adults with a bachelor’s degree earned almost ,000 more per year — that’s every year, over an entire career — than high school graduates in 2014.
Pick an affordable option and you could end up far ahead of the rest.
Pick the wrong school and you could end up chained to student loans for your entire lifetime.
A look at the most recent figures from College Board shows exactly what I mean.
You can’t argue with the fact that, yes, a college degree is most likely a good investment in your future.
The problem is, college degrees and their associated costs are far from standardized.
The bottom line: Student loan debt may make it harder to buy a home.