What Is The Difference Between Federal Student Loans And Private Student Loans
While federal student loans are offered by the government, private student loans are offered by private-sector lenders. Interest rates for private loans are generally higher, cannot be forgiven, and are never subsidized. However, private student loans are not need-based so you can qualify for a higher loan amount if you have good credit.
Debt Lawyer For Sallie Mae Student Loan Settlement
If you want to settle private student loan debt with Sallie Mae, then email me at or call me at 858-217-5051 and we can schedule a free consultation. Whoever you contact to help you lower your student loan debt, make sure it is a an experienced debt relief attorney with a proven track record of student loan debt success stories. I do not recommend going with a debt relief company, which is different than attorneys in a law firm. Debt relief companies are often caught up in debt relief scams taking advantage of people already in a vulnerable positions. Attorneys, on the other hand, are held to ethical obligations under the law to put the best interests of their clients first. And as my clients will tell you, the savings I offer my clients far outweigh my fees. Contact Gamez Law Firm and we can get the ball rolling on getting you out of debt!
Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego and Los Angeles, California. For more information, please contact Daniel Gamez at , or use our online contact form. Stay updated about the latest debt relief tips by following on and and read about client success stories on our website.
Understand Interest To Avoid Capitalization
Interest and capitalization make the amount of money you borrow bigger. Understanding how this works is important.
Interest is the cost of borrowing money. It begins to build up as soon as you get your loan funds. The amount of interest you pay depends on many factors.
- The amount of money you borrow the more you borrow, the more interest you’ll pay.
- The rate at which interest is charged the lower your interest rate, the less interest you’ll pay.
- The length of time it takes you to repay the loanthe sooner you repay your loan, the less interest you’ll pay.
Whether or not the government helps pay the interest depends on whether your loan is subsidized or unsubsidized.
The interest rate on your private student loans is set by your lender while the interest rate on your federal student loans is set by Congress as part of the Higher Education Act. You can learn more about interest rates and fees from Federal Student Aid.
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Student Debt Less Than Seven Years Old
If your student loan is less than 7 years old, then you still have student loan forgiveness options that can help make repayment of your student debt easier. Negotiate new payment arrangements. Try contacting the student loans office to negotiate a new payment arrangement. Repayment assistance is available through the National Student Loan Service Centre and their Repayment Assistance Plan. You can:
- Ask for a temporary reduction in payments including making interest only payments.
- Ask for more time to repay your student debt. You can extend your payment period for up to 14.5 years.
- Apply for a hardship reduction. The government will reduce your interest costs for the first 10 years and may reduce the principal owing after 10 years. However, you must prove financial hardship to qualify, including meeting an income threshold and approval is not guaranteed.
Be aware that the first two options will keep you in debt longer and will increase the total interest you pay on your student debt. The hardship option is the only option, other than bankruptcy or a consumer proposal, that will reduce the total student loan payments you make over time. If you are successful in negotiating new student debt repayment terms, do your best to maintain the payments to sustain your agreement. The area of bankruptcy and student debt can be complicated. We answer more questions on our student debt help FAQ page.
Use The Debt Avalanche Method
If you want to reduce how much you pay in interest, using the debt avalanche method could be a good way for managing your loans. By using this approach, youll tackle the most expensive debt first which will save you money on interest charges and help you pay off your loans faster.
Heres how it works:
If you decide to refinance your student loans, remember to consider as many lenders as you can to find a loan that fits your needs. Credible makes this easy you compare your prequalified rates from multiple lenders in two minutes.
Find out if refinancing is right for you
- Compare actual rates, not ballpark estimates Unlock rates from multiple lenders in about 2 minutes
- Wont impact credit score Checking rates on Credible wont impact your credit score
- Data privacy We dont sell your information, so you wont get calls or emails from multiple lenders
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Student Loan Forgiveness Programs
There are several federal student loan forgiveness programs that can wipe out a portion of your remaining student loan debt if you qualify. Its wise to continually check eligibility criteria. Some programs such as Public Service Loan Forgiveness are notoriously hard to qualify for.
Also note that there are programs to pay back a portion of your loan, even if you dont get full forgiveness. These are called loan repayment assistance programs , and they vary by location, profession and other factors.
How To Address Those Loans Before You Tie The Knot
Student loan debt may be the biggest financial issue facing young adults today. Nearly 70% of recent college graduates have student debt and, as tuition and other costs continue to rise, having to borrow money to earn a degree is often unavoidable.
Although taking out student loans for undergraduate or graduate school typically involves just the person earning the degree and possibly their parents, figuring out how to pay off those loans when you’re married is another story.
Here’s advice to help engaged couples plan ahead for managing their student debt.
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How To Negotiate A Federal Student Loan Settlement
Once you default on your federal student loans, the U.S. Department of Education is often willing to settle your FFEL, Direct Loans, and Perkins loans.
To negotiate a federal student loan settlement:
Know your options ahead of time to negotiate effectively. Federal student loan settlements typically fit into one of these 3 options:
- You pay the remaining principal and interest, plus any collection costs are waived.
- You pay the principal and half of the unpaid interest accrued since the loan went into default.
- You pay 90% of the current principal and interest balance.
Start by offering the minimum you think you can settle for. This leaves room for a counteroffer that may still be in your favor.
Keep in mind: Lenders are likely to sweeten the deal if they know youâre able to settle quickly with cash on hand.
What Is The Best Way To Get Rid Of Student Loan Debt
With any debt, the best way to get rid of it is to pay for it. But if youre struggling to make or afford payments, talk to your lender about your options. You might qualify for deferment, forbearance or an income-driven repayment plan. You could also refinance your loans to get a lower interest rate or lower monthly payment . Student loan debt settlement is one option, but that doesnt mean its the best option for everyone.
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How To Get A Moratorium On A Loan
If you’re overwhelmed by student loan debt that you cant afford, you may find that negotiating a payoff can be a bit tougher than settling other debts. Help is available if you took out government-sponsored student loans, but loans from private lenders are another matter. You can hire a professional to assist you, but if you’re having difficulty paying back your student loan, you probably cant afford to pay the additional fees. That leaves you to negotiate repayment of your student loan for yourself.
To negotiate your student loan debt, you’ll need to review your records, contact your lender and make an offer that you can afford. The lender may accept your offer or come back with some additional payment options.
Strategic Student Loan Default
Considering a strategic default to deal with your federal student loans?
A word about that: don’t.
It’s not worth strategically defaulting on your federal student loans.
âFirst, you have to miss 9 monthly student loan payments before you can get a settlement.
Second, under the current settlement process, you’ll typically only save somewhere between 10-15% of the current balance.
There’s no way to negotiate a settlement for what you originally borrowed.
Finally, the government won’t offer you more than 90 days to pay the settlement amount.
Instead of strategically defaulting, you’re better off getting into one of the income-driven repayment plans like income-based repayment. At least that way you can pursue student loan forgiveness.
I suggest that path because, again, federal student loan debt settlement offers suck.
They’re really expensive.
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Reasons For A Private Student Loan Settlement
Federal student loan borrowers arent the only ones eligible for a settlement. Private student loan settlement is also an option if your loans are in default.
Most federal student loans consider loans to be in default if you havent made a payment in more than 270 days. For private student loans, most loans will default after 120 days of nonpayment, though this depends on your lender.
If you can show your lender that you dont have income or assets to pay back your loan, your lender might accept a settlement offer. However, youll still need to have an offer worth accepting, which usually includes a lump-sum offer or a final amount paid over the course of a few installments.
Get Debt Advice For Your Student Loan From A Toronto Insolvency Trustee
Licensed Insolvency Trustees are the only federally regulated debt advisors operating in Canada. Contact Remolino & Associates and a Licensed Insolvency Trustee will review your financial situation to determine if you can qualify for student debt relief.
Discover the best options to eliminate your student loan debts. Contact a Remolino & Associates trustee and get a free consultation today.
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Student Loan Settlement: Are You Eligible To Pay Less Than You Owe
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Student loan settlement could be wise in extreme cases, however, such as when:
Does Consolidating Student Loans Affect Your Credit
Student loan debt consolidation can affect your credit both positively and negatively depending on how you manage the loan.
With federal student loan consolidation, credit scores dont get hurt since you are repaying the debt in full.
If you take out a consolidation loan to repay your private student loan and again default on the new loan, then it can affect your credit health severely.
But paying off student loans by enrolling in a debt consolidation loan is always better. Because
- Once you enroll in a debt consolidation loan, it makes your payment more affordable.
- Your debts are eliminated after completing the consolidation program successfully.
- The account status will show as paid in full after you have cleared all your dues.
- You can add positive information to your credit report at various times.
- Gradually, your credit ratings will improve.
Overall, if you consolidate your student loan debts, your credit score will not suffer.
Lastly, debt consolidation can be a good option to repay your federal and private student loan debts. If you are still not sure where to start to repay your student loans, you can consult with a CFA for help. It is always recommended to consider a student loan planner to help you put together a solid payoff plan for your student loan deb
By bestdebtconsolidation_admin on December 27, 2020
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What Is Student Loan Settlement
If you have a large student loan balance, settling loans is a way to reduce what you owe and eliminate any future obligation to repay the loans.
Student loan settlement is a process where you negotiate with your loan servicers or collection agencies and agree to make a lump-sum payment. If the loan servicer or agency agrees to the terms, you will pay an amount that is lower than what you owe in outstanding loans, collection fees and interest charges.
Once youve followed the terms of the settlement, the loan is marked as settled, and your obligation for the loans is satisfied. The default status will be removed from your credit report, but the settlement can still affect your credit.
What Happens If You Default On Your Student Loan
The consequences of defaulting on your student loan can be bad for your financial health.
Heres what happens when you default on your student loan.
- Your loan and its interest becomes due and payable
- You will not be able to become eligible for programs like student loan forgiveness, forbearance, deferment, and changing repayment plans
- You will not be eligible for additional financial aid
- Your loan will be reported to the 3 credit bureaus as a delinquent
- Defaulting on loans can hurt your credit score
- Your wages can be garnished to repay the debt
- Your lender can send the loans to the collection agencies for collection.
- You could have your tax return, social security and federal payments garnished.
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When Is Private Student Loan Settlement An Option
You can enter negotiations to settle private student loans after the loan is in default and when the private lender is willing to listen to settlement offers.
A private lender may be more inclined to settle a debt if:
- You can prove that you have few-to-no assets and very little income, or
- You are represented by an expert, like a student loan attorney
Many private loans default after 120 days of non-payment, but this varies by lender. Typically, a private lender will begin listening to settlement offers 6 months after the last on-time monthly payment.
A student loan settlement is a good option if you can afford a lump sum to offer the lender, or if a lump sum plus monthly payments.
Monthly payments by themselves usually don’t lead to great settlement offer.
When Can I Settle My Student Loans
You may have to wait a while before you can settle your student loans. You cant settle if your loans are in good standing and you make timely payments every month. Even if youre a little late on your last payment, youre usually not considered eligible until youre in default.
When youre late making a student loan payment, your loans are delinquent until you make that payment. If your loan continues to stay delinquent, it will eventually go into default. You can start requesting a loan settlement in delinquency, but only if its on its way to default. You can also request a settlement once your loan has passed into default.
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Is It Smart To Consolidate Your Student Loan Debts
You can think about why you should consolidate your student loan debts. Is it a smart decision? Well, consolidating student loan debt depends on the debt situation you are in and your income. If you think that your financial situation is going to improve in a few months, then debt consolidation might be one of your best debt solutions.
Heres how can debt consolidation can help you repay your student loans:
Lower interest rates
The interest rates on the debt consolidation loan will be much lower than what you were paying on the student loans. As interest rates will be lower, you can easily repay your student loans in small and affordable monthly payments without having to fall back on all the other debt obligations that you have in a month.
Longer repayment terms
As the students usually live on a fixed income, they usually look for ways to repay the debt in small monthly payments. Through a debt consolidation loan, they will get the chance of repaying the debt throughout an extended period of time, thereby saving money every month.
Single monthly installment
If you are unable to remember multiple due dates, you can replace them with a single monthly payment through a student debt consolidation loan. You just have to make a single payment to the loan and forget the hassle of remembering multiple due dates.
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