The secret to negotiating with student loan creditors
Did you know that the average student will graduate with $35,000 in student loan debt this year? Most of these students will have a very hard time paying down that debt. If you’re one of those students, struggling with the heavy weight of student loans, you are not alone! Many graduates face serious student loan bills, frequent calls from collectors, and bad credit ratings as a result of not paying student loans on time.
Clearly, a situation like this one can leave anyone feeling helpless and hopeless. Plus, student loan debt is one of the biggest factors when it comes to delaying things like buying a home, or even having children. But there is some good news; there are some ways to get on with your life and negotiate your student loan debt down. However, doing that isn’t always easy. Here are some of our Top Tips to help guide you:
The Federal Loan Fix:
You can’t negotiate a federal student loan. However, it is somewhat simpler to defer these loan payments, OR to opt for something like an “income sensitive” filing. Can you eliminate any of the true amounts of federal debt that you owe? No. Is there anything that you can do if you have defaulted on a federal student loan? Yes! You can negotiate a payment plan to lessen the load.
How do you negotiate a good payment plan? Speak with the debt collector, and find a plan that works for you – but keep in mind that you will have a hard time negotiating anything if your debt has been brought to a court. The only way to get out of a lawsuit situation is with the help of an experienced attorney in your State, and you’ll absolutely need one if a federal lender has petitioned to garnish your wages or tap into your bank account(s).
Private Loans-Use Caution Ahead:
Private loan territory is a tricky one. If your debt has not yet been sold to a collector, you may still have some negotiating power. Most of the time however, the discount that you can get on a private loan is minimal. What if your debt has been sold to a collector? Well, you still have some negotiating power, and most collectors will offer you a deal outright. But it’s important to pay attention to the deal that you’re truly getting.
Is the collector offering you a legitimate discount, or are they just waiving the interest and other fees that have accrued over the past, say, five years? Would you have been better off simply making those minimum payments and chipping away at your debt? Possibly! You’d have to weigh the deal that’s being presented to you. It’s also worth pointing out that a collector might offer you a deal, but you will have to pay that amount in full – you usually can’t pay in installments if a collector is offering you a bargain deal. Be very cautious and ask questions!!
Are You Being Sued?
If you have defaulted on a private student loan, there’s a good chance that you may end up being served some legal papers. In this case, a court may find that you must pay back some of your loan, but this will all depend on how much you earn and owe. If you have been served, make sure to hire a lawyer to help you out of this situation. Typically, you can get out of this type of debt, but it does depend on a number of different factors. The best plan is to speak with an attorney about your situation and what your options are.