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How are student loans (for a graduate degree) viewed by prospective lenders? Are they viewed differently than unsecured credit card debt?

Good reply by jthrelkeld: Student loans are considered installment (rather than revolving) debt and they have to be paid on time or they have a negative impact on your credit rating.

One other point is that lenders sometimes look at how much of your income is going towards debt. This debt includes "good" installment debt, such as auto loans and school loans, as well as "bad" revolving debt, like credit cards and lines of credit. If you are trying to qualify for a mortgage and too much of your income is going towards debt, this is going to be a negative factor in the lender's decision. The debt payment to income ratio is known as the "back-end ratio". If school loans jack up your back-end ratio, you might not qualify for as much house as you'd want, regardless of your credit history.

I financed my graduate degree with school loans and I have two bits of advice:
1) Only take out what you need, not enough to finance a lifestyle of "wants". My wife and I took out the maximum, but we could have made it on much less. We used to eat at restaurants 4 or 5 times a week, etc. Now we have a ton of school loans to pay.
2) For unsubsidized school loans, do not let the interest capitalize while you are in-school or during the grace period. We did and that added several thousand dollars to our school loans which took the first year and a half to pay off. (Unsubsidized loans accrue interest during in-school and grace periods. With subsidized loans the interest is paid by the government during that time.)

OT: Was financing my education worth it? Yes. I started out making 5 or 6 thousand dollars a year more than people with a Bachelors in the same position. It's a lot easier to get your graduate degree before starting to work full-time, too.

Good luck with your degree! :)
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