Tips to Negotiating your Student Loan Settlement
If ever you have a problem with regards to student loans, know that you are not alone on this. But, you still have options.
So how will one be able to negotiate student loan payoffs? Below would be some tips that will be able to help in increasing your chance of getting favorable results. Be sure to read more here for you to know the options available.
Avoid Waiting Until Default to Negotiate
You actually can avoid student loan settlements if you are going to take preventive measures before the loan will go default.
Through a federal loan, defaults mostly starts after you have gone without making any payment in a year. With the private loans, you can actually go into default when you have not made any payments within 90 days.
Rather than having to let the default deadline end up limiting your choices for negotiating student loan payoffs, consider talking to your lender first on options like deferment or forbearance, income-driven repayment plans as well as with consolidation or refinancing.
Through an income-driven repayment plan, you can actually qualify and can get a cap on the monthly payments and you also will get relief with the interest.
With deferment or forbearance, you could temporarily reduce on the payments or you could temporarily stop in making them.
Through the consolidation or refinancing, the former involves the case of combining balances on multiple loans to just one payment and the latter involves the case of looking for more favorable interest rates as well as repayment terms.
The pre-default opportunities vary based on the circumstances, which includes if you have a private or federal loan. See to it that you check on the terms of the loan agreement prior to making contacts with the lender.
Talk about Hardship Programs with the Lender
For most cases, a student loan settlement is an option for borrowers who have exhausted payment reductions as well as postponement programs which were offered by the lender. For the federal government, it includes income-driven repayment plans, graduated and deferment and forbearance options, that are also being offered by most of the major private lenders.
Kinds of Settlement Offers
Student loan settlements are mostly made possible in cases to where the borrower could offer a lump sum. The collection agencies have been authorized to accept three types of settlements without getting an approval from the Department of Education. These are:
Amount remaining loan principal and accrued interests.
The principal as well as half of the unpaid interest.
90% of the loan and its interest balance.
A settlement which does not fit to these three categories are really uncommon. It may however take longer to get because the Department of Education needs to review it first.
Consider a Request for a Paid-in-full Statement
If ever a settlement will be possible, consider having your attorney review the terms of the offer and to also request documentation that shows all the student loans were paid and have been settled.