I've defaulted on my Student Loans and they have now been turned over to a 3rd. party company. I have been in contact with the company and they have given me 3 options on repaying a 29k loan:
1. Option 1: Pay 24k in one lump sum
2. Option 2: Pay 3k down and then pay $450 per month until the loan is paid off.
3. Option 3: 0 down with $650 per month in payments.
Now if I agree to one of the last two options with on time payments for the next 9 - 12 months they promise to remove the late/default status and change it back to a normal "paying as agreed" status. The loan will then be sold to another company for continued payment. Seeing as I don't have the 3k to pay down now I will have to go with the $650 per month. My questions are as follows:
* Should I get the promise of "changing my loan status from "default" in writing from them before I agree to payments?
* Agree to these terms? In looking at posts from others $59k + loans the monthly payments are only a bit higher than what they are offering. Can I get a better payment that $650 per month?
* If they do agree to change the status of my loans how does this debt look on my credit when trying to purchase a house? Is this considered good debt or just the same as all debt?
There's tons of good info on this site, thanks for everyone's effort on supplying us all with this information.
Full Version: Student Loan Questions (defaulted loans)
QUOTE(brklyn @ Jul 15 2007, 05:02 PM) 
I've defaulted on my Student Loans and they have now been turned over to a 3rd. party company. I have been in contact with the company and they have given me 3 options on repaying a 29k loan:
1. Option 1: Pay 24k in one lump sum
2. Option 2: Pay 3k down and then pay $450 per month until the loan is paid off.
3. Option 3: 0 down with $650 per month in payments.
Now if I agree to one of the last two options with on time payments for the next 9 - 12 months they promise to remove the late/default status and change it back to a normal "paying as agreed" status. The loan will then be sold to another company for continued payment. Seeing as I don't have the 3k to pay down now I will have to go with the $650 per month. My questions are as follows:
For starters NO downpayment is required for rehab which is what they are offering.
* Should I get the promise of "changing my loan status from "default" in writing from them before I agree to payments?
It is already in writing...it is called the Higher Education Act. However only the guarantor will remove the defult tradeline. The original guarntor/lender is under to requirement to change their tradeline.
* Agree to these terms? In looking at posts from others $59k + loans the monthly payments are only a bit higher than what they are offering. Can I get a better payment that $650 per month?
It depends what you consider a better payment. If you can afford $650 for the 9 months, it will end up giving you a lower payment for the balance of the loan. If you can't afford it, under the HEA you are entitled to "reasonable and affordable" payments. Generally qualify payments for a rehab are at 1%.
* If they do agree to change the status of my loans how does this debt look on my credit when trying to purchase a house? Is this considered good debt or just the same as all debt?
There's tons of good info on this site, thanks for everyone's effort on supplying us all with this information.
1. Option 1: Pay 24k in one lump sum
2. Option 2: Pay 3k down and then pay $450 per month until the loan is paid off.
3. Option 3: 0 down with $650 per month in payments.
Now if I agree to one of the last two options with on time payments for the next 9 - 12 months they promise to remove the late/default status and change it back to a normal "paying as agreed" status. The loan will then be sold to another company for continued payment. Seeing as I don't have the 3k to pay down now I will have to go with the $650 per month. My questions are as follows:
For starters NO downpayment is required for rehab which is what they are offering.
* Should I get the promise of "changing my loan status from "default" in writing from them before I agree to payments?
It is already in writing...it is called the Higher Education Act. However only the guarantor will remove the defult tradeline. The original guarntor/lender is under to requirement to change their tradeline.
* Agree to these terms? In looking at posts from others $59k + loans the monthly payments are only a bit higher than what they are offering. Can I get a better payment that $650 per month?
It depends what you consider a better payment. If you can afford $650 for the 9 months, it will end up giving you a lower payment for the balance of the loan. If you can't afford it, under the HEA you are entitled to "reasonable and affordable" payments. Generally qualify payments for a rehab are at 1%.
* If they do agree to change the status of my loans how does this debt look on my credit when trying to purchase a house? Is this considered good debt or just the same as all debt?
There's tons of good info on this site, thanks for everyone's effort on supplying us all with this information.
are these federal student loans, or private loans? I ask, because when my private loans went into default, those are the types of options I was given. Private loans function a little differently than federal loans.
QUOTE(malayna @ Jul 17 2007, 11:04 AM)
are these federal student loans, or private loans? I ask, because when my private loans went into default, those are the types of options I was given. Private loans function a little differently than federal loans.
Since they are discussing 9-12 months of payment for rehabbing a loan, they would have to be federal.
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