Student Loans Listed as Transferred

College students checking credit
Dear Experian,

My student loans were consolidated into a new loan. Both the new loan and all of the old loans are on my credit report. The old loans say transferred. Should they be closed as well?


Dear DSH,

Multiple student loans are often consolidated into a single loan by transferring the unpaid amounts into one new loan. A consolidated loan usually has a lower interest rate and a much longer repayment period, which can reduce monthly payments so that the debt is more manageable. However, the longer repayment period may result in the total repayment amount being more. If consolidating the loans enables you to repay the entire debt as agreed, it can be a worthwhile tradeoff from the standpoint of your creditworthiness.

Credit Report May Show Separate Loan for Each Semester

Often, a new student loan is opened each semester, so it is possible that two loan entries would appear on your credit report for each school year. Those loans will not be deleted immediately after the consolidation. Instead, the status of each of them will be updated to reflect that they were included in the loan consolidation.

A Transferred Account Is Considered a Closed Account

In your case, the loan balances were all transferred by your lender from the old accounts into the new consolidation loan. The status of the old accounts was updated to "transferred" to accurately reflect that action. A "transferred" status is considered final, meaning the account is no longer active.

If the consolidation loan was from a new lender and the funds had been used to pay off the balances from other lenders, the status of each of the old accounts may have been updated to "paid." A "paid" status is also considered final.

The term "closed" is used to describe revolving accounts, such as credit cards, that are no longer available for charges, so it would not apply to student loans, which are installment accounts.

Thanks for asking.
- The "Ask Experian" team