PLUS loan affecting credit score?

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PLUS loan affecting credit score?

Postby martink » Mon Jul 27, 2009 10:56 am

Hi, I need to take out a PLUS loan to help with college, and, since its in my parents name, I guess its technically them taking it out. I plan on deferring payment on the loan until after I have completed college and I also plan on paying the amount in place of my parents paying.

My concern is how this may affect their credit; I want to take out the full amount for each semester and then return whatever I predict I will not need within the 120 day grace period. What portions of this decision (principal amount of loan, time repaying loan, etc) will affect their credit, and how drastically? I would like this to impact them as minimally as possible.


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Re: PLUS loan affecting credit score?

Postby Financial Aid Guru » Thu Sep 10, 2009 8:02 am

Hello Martin,

It will effect your parent (which ever one is listed) a lot. You have no financial obligation on a Parent Plus loan, it is all on them regardless of your intention to make the necessary payments. This loan will show up on his or her credit report until the day it is paid off. There is also no chance of consolidating the loan with other federal Stafford loans you may have secured.

In short, it will impact them a lot.
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