What to do if your student loans go into default?
Joe M asked:
Is there any kind of way to get out of default with student loans, i can make siggnificant payments but the loan company is not working with me. Would it be a good idea to take out a personal loan to pay them off? Suggestions please?
Is there any kind of way to get out of default with student loans, i can make siggnificant payments but the loan company is not working with me. Would it be a good idea to take out a personal loan to pay them off? Suggestions please?
Tags: Loan Company, Personal Loan, Student Loans
May 31st, 2009 at 2:12 am
What kind of loans are they and who is your servicer?
May 31st, 2009 at 7:45 am
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June 2nd, 2009 at 4:10 pm
The only way out of default is to pay your loans. If they are federal loans, you can contact Direct Loans and have all of your stafford loans consolidated through Direct Loans.
You need to contact your lender/servicer to arrange a payment plan. They will work with you. They have numerous payment plans. Even an income contingent plan, where your monthly payment is based off of your monthly income. For some people this amount is 0! You have to contact them, and you have to speak to different people until someone can help you.
If they are private or alternative loans, then you are really at the Mercy of the Lender, because they are not regulated by the govn’t like Federal Stafford Loan.
June 4th, 2009 at 7:59 pm
Send them your so called “significant payments” anyway. They aren’t going to refuse your money, trust me.
June 8th, 2009 at 5:11 am
You lose a lot of rights and benefits when you go into default on your student loans. Until your loan payments are caught up you will have fewer options.
There are two ways to get out of default on federal loans. Assuming you are talking about federal student loans and not private loans. One is you can consolidate through the Direct Lending program. The second is that you can arrange through your lender to set up a satisfactory repayment plan to rehabilitate your federal loans. You have to make 12 consecutive on-time monthly payments to rehab your loans.
If you are in default on private loans you are at the mercy of the lender and their collections department. Good luck with that situation. If it is federal the loan company is going to work with you. They have no other option. If you send them money they will apply it toward your balance, but your best bet is to work out one of the two above options.