Ok, so I want to buy a house next summer, but I have a defaulted Student Loan (Sallie Mae). It's only like $2k these days, as they've been taking my tax returns for a few years.
I want to pay it off, but I need some advice. I can pay it off in one amount, or get it into rehab. It's only currently showing on one report as Sallie Mae with last activity of Feb '02. The USA Funds accts all disappeared off all reports. It's now being handled by Ahlied I think, and I only know that from logging on to whatever Federal site that is and tracking down who was handling it, as I don't get calls/mail on it, nor do they show up on any credit reports.
What is the difference between me paying it off in one lump sum, or rehabbing, as far as my credit reports go? I'd rather pay it off in one lump sum. I'm afraid if I put it into rehab, they'll still take my tax return this year, which will pay it off...but won't give me the benefit of being able to knock out the collection fees if I just called them up and settled it.
I really want to take care of it without it affecting my credit again, as my credit scores are all in the 750's now, and I worked very hard to get them that way.
Full Version: Student Loan Default
QUOTE(shadow2k @ Jan 16 2008, 04:00 PM) 
Ok, so I want to buy a house next summer, but I have a defaulted Student Loan (Sallie Mae). It's only like $2k these days, as they've been taking my tax returns for a few years.
I want to pay it off, but I need some advice. I can pay it off in one amount, or get it into rehab. It's only currently showing on one report as Sallie Mae with last activity of Feb '02.
Keep in mind that with student loans, date of last activiity is not used for reporting purposes. Everything is calculated from the defeault date or the claim paid date. The claim paid date can be 9 months or more after the date of last activity.
The USA Funds accts all disappeared off all reports. It's now being handled by Ahlied I think, and I only know that from logging on to whatever Federal site that is and tracking down who was handling it, as I don't get calls/mail on it, nor do they show up on any credit reports.
Allied does not report. However USAF could reappear at any time until the end of the reporting SOL,.
What is the difference between me paying it off in one lump sum, or rehabbing, as far as my credit reports go? I'd rather pay it off in one lump sum. I'm afraid if I put it into rehab, they'll still take my tax return this year, which will pay it off...but won't give me the benefit of being able to knock out the collection fees if I just called them up and settled it.
With 750 credit and that low a balance, you are not going to get much of settlement, it any. If you havent paid anything voluntarily in the last 12 months, the lien is already on your taxes.
I really want to take care of it without it affecting my credit again, as my credit scores are all in the 750's now, and I worked very hard to get them that way.
I want to pay it off, but I need some advice. I can pay it off in one amount, or get it into rehab. It's only currently showing on one report as Sallie Mae with last activity of Feb '02.
Keep in mind that with student loans, date of last activiity is not used for reporting purposes. Everything is calculated from the defeault date or the claim paid date. The claim paid date can be 9 months or more after the date of last activity.
The USA Funds accts all disappeared off all reports. It's now being handled by Ahlied I think, and I only know that from logging on to whatever Federal site that is and tracking down who was handling it, as I don't get calls/mail on it, nor do they show up on any credit reports.
Allied does not report. However USAF could reappear at any time until the end of the reporting SOL,.
What is the difference between me paying it off in one lump sum, or rehabbing, as far as my credit reports go? I'd rather pay it off in one lump sum. I'm afraid if I put it into rehab, they'll still take my tax return this year, which will pay it off...but won't give me the benefit of being able to knock out the collection fees if I just called them up and settled it.
With 750 credit and that low a balance, you are not going to get much of settlement, it any. If you havent paid anything voluntarily in the last 12 months, the lien is already on your taxes.
I really want to take care of it without it affecting my credit again, as my credit scores are all in the 750's now, and I worked very hard to get them that way.
Thanks for the reply Lynn.
So is there any benefit of getting it into rehab as opposed to paying off in full? I'm concerned about putting it into rehab, as I need a clean credit history for 12 months to buy a house. If I put it into rehab, I assume that would be starting after my 6th payment, where as if I PIF, it would start right away. Is that correct? I always hear people gushing about how rehab helped them, but I'm wondering if that's just because there debts are still on their credit reports, and they can't PIF anyway.
So basically, if I can PIF...is there any reason I'd rather do rehab instead?
So is there any benefit of getting it into rehab as opposed to paying off in full? I'm concerned about putting it into rehab, as I need a clean credit history for 12 months to buy a house. If I put it into rehab, I assume that would be starting after my 6th payment, where as if I PIF, it would start right away. Is that correct? I always hear people gushing about how rehab helped them, but I'm wondering if that's just because there debts are still on their credit reports, and they can't PIF anyway.
So basically, if I can PIF...is there any reason I'd rather do rehab instead?
Rehab will have the derogatory history removed from the CBRs upon funding to new lender (10 or 12 months dependant upon your original loan type). Meaning that you will have no history of default, only the newly funded edu loan.
PIF will show collection student loan account paid in full.
Your choice.
PIF will show collection student loan account paid in full.
Your choice.
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