Full Version: Please help me. I need advice, I'm so lost, and scared!
Hi friends. My name is Will V. As of now, I have a 10k debt to Sallie Mae/NCO. My loan has been in default since November 2006. I originally owed just over 5k, but now with interest, it had ballooned to just under 10k. I haven't been working ALL YEAR and I'm very fortunate to have sparse help from my family to try and fix this. I have to call NCO this week and make a permanent plan to re-pay and fix my credit. The most I have for them is $250 a month automatically deducted from a new bank account I will open this week. What I want to do is get my loan off default and back to Sallie Mae if possible and importantly fix my credit. Is there any chance I can get the interest removed or drastically lowered? Interest will kill me and I'll NEVER be able to stay afloat. I'm so lost and very scared, I know how terrible my situation has become and I don't know what to do. Please, anybody, any info will be great! Thanks!
2 options:
You mentioned being unemployed "this year"... are you able to document that you were unemployed, seeking full-time employment, and registered with a private or public employment agency as of a date before 11/06? If so, you may be able to get SLM to repurchase the loan from USAF, and process a retroactive unemployment deferment to cover the delinquency that lead to default. They are not required to do this, since it was your responsibility to get the deferment, make your payments, or reach another arrangement acceptable to them before you defaulted, but they may choose to take the loan back at their discretion. Your ability to documenteligibility for a deferment, and efforts you made to avoid default should weigh heavily upon their decision.
Next option is rehab. If you pursue the 1st option it is still best to arrange a rehab plan with the guarantor or CA collecting on your loan now, since it provides further evidence that you intend to repay the loan, are acting in good faith, and are serious about getting it out of default.
You will not likely be able to get interest that's already accrued and collection costs already assessed removed from what you owe in either of the above 2 options... unfortunately if the charges are legal per HEA and it took assignment to a collection agency to get you to start repaying your loan, you are almost always responsible for all allowable collection costs and interest. The sooner you get this resolved, the less additional collection costs will be added to what you already must repay. Outside of subsidized loans in an authorized deferment, you will always be responsible for interest.
You mentioned being unemployed "this year"... are you able to document that you were unemployed, seeking full-time employment, and registered with a private or public employment agency as of a date before 11/06? If so, you may be able to get SLM to repurchase the loan from USAF, and process a retroactive unemployment deferment to cover the delinquency that lead to default. They are not required to do this, since it was your responsibility to get the deferment, make your payments, or reach another arrangement acceptable to them before you defaulted, but they may choose to take the loan back at their discretion. Your ability to documenteligibility for a deferment, and efforts you made to avoid default should weigh heavily upon their decision.
Next option is rehab. If you pursue the 1st option it is still best to arrange a rehab plan with the guarantor or CA collecting on your loan now, since it provides further evidence that you intend to repay the loan, are acting in good faith, and are serious about getting it out of default.
You will not likely be able to get interest that's already accrued and collection costs already assessed removed from what you owe in either of the above 2 options... unfortunately if the charges are legal per HEA and it took assignment to a collection agency to get you to start repaying your loan, you are almost always responsible for all allowable collection costs and interest. The sooner you get this resolved, the less additional collection costs will be added to what you already must repay. Outside of subsidized loans in an authorized deferment, you will always be responsible for interest.
::BUMP:: PLEASE, MORE HELP!!! 
The above advice was really good, there is no magic way to solve this issue.
Another option would be to pay it off with a low interest loan or card, and make payments to another lender. Or, I know this is a possibility for very few people, you can ask a family member to pay it off and pay them back. All ways are difficult, but the sooner you start paying and get it settled, the less stress you will feel. $10k seems a lot now, but it is a totally manageable amount of debt (with 2 p/t jobs you could pay it off in a year), no matter how it seems at the current time. Good luck!
Another option would be to pay it off with a low interest loan or card, and make payments to another lender. Or, I know this is a possibility for very few people, you can ask a family member to pay it off and pay them back. All ways are difficult, but the sooner you start paying and get it settled, the less stress you will feel. $10k seems a lot now, but it is a totally manageable amount of debt (with 2 p/t jobs you could pay it off in a year), no matter how it seems at the current time. Good luck!
Is this a private loan or a federal loan???
If it is federal, unless you are going to try to settle the loan, no interest will be waived or reduced. If federal, your interest accrual right now is only about $60/month so if you start paying what you propose you will make some headway.
If it is federal, unless you are going to try to settle the loan, no interest will be waived or reduced. If federal, your interest accrual right now is only about $60/month so if you start paying what you propose you will make some headway.
My loan is a private loan. Before interest it was somewhere close to $5k, now after interest/fees its at $9600.
NCO told me something about a 25% "collection" fee and 18.25% interest. When do I accrue that interest, yearly or monthly? Is the 25% a one time fee they hit me with or is that accrued once annually or divided over 12 months making it 2.083% monthly? Same with the interest 18.25% figure they told me, is that accrued once annually or divided over 12 months making it 1.52% monthly? I'm confused about that, she made it sound like that interest builds monthly, and if that's the case, I'll never be able to pay this off. I'm sure those are APR's. I know at this point I have no choice but to pay NCO, and there's no way possible I can settle one lump sum with them OR even get a bank loan to pay them off in one sum. They offered to take $3k off the top if I could get a bank loan to pay off my student loan but my credit is shot and I'm sure nobody will co-sign so that's out of the question. Is there any way possible to get into a loan rehabilitation with a private loan or at least get back to Sallie Mae after "x" amount of large on time payments? And, how can I get my credit score and credit report fixed? Sorry friends, I'm really lost here and the more I try to get things done, the more confused I get and more questions pile up in my head. Once again, thanks for your time and help!
NCO told me something about a 25% "collection" fee and 18.25% interest. When do I accrue that interest, yearly or monthly? Is the 25% a one time fee they hit me with or is that accrued once annually or divided over 12 months making it 2.083% monthly? Same with the interest 18.25% figure they told me, is that accrued once annually or divided over 12 months making it 1.52% monthly? I'm confused about that, she made it sound like that interest builds monthly, and if that's the case, I'll never be able to pay this off. I'm sure those are APR's. I know at this point I have no choice but to pay NCO, and there's no way possible I can settle one lump sum with them OR even get a bank loan to pay them off in one sum. They offered to take $3k off the top if I could get a bank loan to pay off my student loan but my credit is shot and I'm sure nobody will co-sign so that's out of the question. Is there any way possible to get into a loan rehabilitation with a private loan or at least get back to Sallie Mae after "x" amount of large on time payments? And, how can I get my credit score and credit report fixed? Sorry friends, I'm really lost here and the more I try to get things done, the more confused I get and more questions pile up in my head. Once again, thanks for your time and help!
QUOTE(wILLk0r3 @ Aug 29 2007, 03:42 PM) 
My loan is a private loan. Before interest it was somewhere close to $5k, now after interest/fees its at $9600.
NCO told me something about a 25% "collection" fee and 18.25% interest. When do I accrue that interest, yearly or monthly? Is the 25% a one time fee they hit me with or is that accrued once annually or divided over 12 months making it 2.083% monthly? Same with the interest 18.25% figure they told me, is that accrued once annually or divided over 12 months making it 1.52% monthly? I'm confused about that, she made it sound like that interest builds monthly, and if that's the case, I'll never be able to pay this off.
For information on how your interest accrues, refer to your lenders website.
I'm sure those are APR's. I know at this point I have no choice but to pay NCO, and there's no way possible I can settle one lump sum with them OR even get a bank loan to pay them off in one sum. They offered to take $3k off the top if I could get a bank loan to pay off my student loan but my credit is shot and I'm sure nobody will co-sign so that's out of the question. Is there any way possible to get into a loan rehabilitation with a private loan or at least get back to Sallie Mae after "x" amount of large on time payments?
Nope...rehab is not an option for private loans and Sallie Mae will not take back defaulted loans, regardless of the terms.
And, how can I get my credit score and credit report fixed?
You really can't other than getting this paid off quickly and then letting time heal your credit. Get a couple of jobs and knock this puppy out as quickly as you can.
Sorry friends, I'm really lost here and the more I try to get things done, the more confused I get and more questions pile up in my head. Once again, thanks for your time and help!
NCO told me something about a 25% "collection" fee and 18.25% interest. When do I accrue that interest, yearly or monthly? Is the 25% a one time fee they hit me with or is that accrued once annually or divided over 12 months making it 2.083% monthly? Same with the interest 18.25% figure they told me, is that accrued once annually or divided over 12 months making it 1.52% monthly? I'm confused about that, she made it sound like that interest builds monthly, and if that's the case, I'll never be able to pay this off.
For information on how your interest accrues, refer to your lenders website.
I'm sure those are APR's. I know at this point I have no choice but to pay NCO, and there's no way possible I can settle one lump sum with them OR even get a bank loan to pay them off in one sum. They offered to take $3k off the top if I could get a bank loan to pay off my student loan but my credit is shot and I'm sure nobody will co-sign so that's out of the question. Is there any way possible to get into a loan rehabilitation with a private loan or at least get back to Sallie Mae after "x" amount of large on time payments?
Nope...rehab is not an option for private loans and Sallie Mae will not take back defaulted loans, regardless of the terms.
And, how can I get my credit score and credit report fixed?
You really can't other than getting this paid off quickly and then letting time heal your credit. Get a couple of jobs and knock this puppy out as quickly as you can.
Sorry friends, I'm really lost here and the more I try to get things done, the more confused I get and more questions pile up in my head. Once again, thanks for your time and help!
$9600 balance at 18.25% APR and $250/month payments will be gone in just under five years. Not too long at all. My guess would be the 25% fee was a one time fee once they took over the account. Usually, the way they do interest charges is a daily charge, so when you make a payment you pay the unpaid interest first, then the rest of your payment goes towards principle. If you make a monthly payment at approximately the same time each month, dividing by 12 is a close estimate on how much interest will be charged.
Good luck to you, it might seem like you aren't making any progress, but just keep at it, pick up a second job, find places in your budget to cut back and throw everything you have at it. See if they will lower the APR, if they won't right away ask again after you've made some payments.
And keep reading, this forum is full of good stuff! HTH
(as far as cleaning up your credit, sorry I don't have anything for you...but I'm sure others will)
Good luck to you, it might seem like you aren't making any progress, but just keep at it, pick up a second job, find places in your budget to cut back and throw everything you have at it. See if they will lower the APR, if they won't right away ask again after you've made some payments.
And keep reading, this forum is full of good stuff! HTH
(as far as cleaning up your credit, sorry I don't have anything for you...but I'm sure others will)
Just wanted to say I feel your pain Will. My loans went from $18k to $36 in about a year and back and forth to AES and collections... I haven't been able to keep it under control because the payment is too high for me to afford even in rehab. My loans are federal though. My husbands went from $13K to $24K in the same time and they started garnishing his wages, over 6 months they garnished $6k from him and his balance never dropped. How sad is it that they make it impossible to get ahead? I know where you are. We're in a Ch 13 BK now and thats our only saviour. I am trying to figure out what to do to get this situation under control before we lose the guardian angel............
QUOTE(mamabear @ Sep 26 2007, 06:58 PM)
Just wanted to say I feel your pain Will. My loans went from $18k to $36 in about a year and back and forth to AES and collections... I haven't been able to keep it under control because the payment is too high for me to afford even in rehab. My loans are federal though. My husbands went from $13K to $24K in the same time and they started garnishing his wages, over 6 months they garnished $6k from him and his balance never dropped. How sad is it that they make it impossible to get ahead? I know where you are. We're in a Ch 13 BK now and thats our only saviour. I am trying to figure out what to do to get this situation under control before we lose the guardian angel............
I'm sorry to hear that happened to you...
Good example for anyone about to default. Do not allow your student loans to default, you'll end up owing twice as much and you'll have to pay it back anyway.
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