Student Loan Payoff Negotiation

Obtaining your higher education can be expensive. Most students end up getting government loans to help them pay for the cost of college. Sometimes grants, which do not have to be repaid, can be awarded as well. Scholarships are another source of money for school that you do not have to repay. However, even with these sources you will most likely have one or more student loans as well. One of the most common of all student loans is the Stafford Loan, provided by the federal government. Perkins Loans are for students with financial hardship, and PLUS loans are for dependent students whose parents need assistance with tuition. A student can end up with a number of loans after graduation, and if they have trouble paying for their loans at some point there are student loan payoff negotiation options available.

It is important to understand your obligations when it comes to student loans. Student loans cannot be included in a bankruptcy filing. Therefore, you will somehow have to pay your loans off. If you do not, you can be sued by the government for the amount you owe. This can have far-reaching effects into your future and have a detrimental effect onĀ  your credit rating. If at some point after leaving school, you find yourself in financial hardship and are unable to make your loan payments, it is probably a good time to look into student loan payoff negotiation options.

One option is loan deferment. To defer a loan means to put off payments until you are able to get back on your feet financially. To request a deferment on a loan, call the number on your monthly bill and speak to a representative about this issue. They can discuss what kind of deferment you are able to qualify for. One example might be a six month payment deferral. Usually, deferment is the first course of action for those who are having trouble making loan payments.

Another option is loan consolidation. Most students end up with multiple loan payments after college. This can not only be expensive, but hard to keep track of. Federal student loans can only be consolidated once, so make sure it’s the right time for consolidation before taking this step. By consolidating your student loans, you can change the terms and extend the consolidated loan. You may also be able to lower the total amount of interest you are paying. By doing this you can end up paying less each month, and only having to send off one payment instead of multiple payments. The lower cost combined with the convenience of one payment can make it easier for you to meet your obligations.

Yet another method of student loan payoff negotiation is working with your loan officer to obtain lower interest rates, which can lower the total amount you’re paying on each loan you are able to lower. Even a small reduction can add up over the years. Payment settlements may also be offered to you if you have missed payments and have exhausted all the possible options listed above. An example of a settlement offer might be paying off a $2000 loan for $1500. This is only an example and the actual amounts will vary based on different factors.

The best way to navigate student loan payoff negotiation is to contact a financial representative as soon as you realize you are having payment issues. The longer you wait, the more in debt you will get and it will be harder to get a favorable repayment option. Even though the federal government is strict when it comes to collecting on student loans, they are also willing to work with loan holders in need and give them different ways to make loan repayment easier.