Can I settle my student loan debt? Whether it is a federal or private student loan, you can always settle your student loan debt. Student loan settlement is something that is possible, but everything depends on your lender to accept less than what you originally owe.
Can I Settle Student Loan Debt
Just as mentioned already, you can always negotiate for a student loan settlement, but there is however some factors that need to be in place for that to happen. To negotiate, your loans need to be in default or near default. Your loan holder will need to make more money by settling rather than pursuing the debt in the long run and you also can save or have lots of cash stashed elsewhere that you can use in paying the settlement amount in full or over a couple of installments.
You should never try to miss out on loan payments in a bid to try and force a debt settlement. Doing this will damage your credit severely. Collection costs also can be added to the amount that you originally owe, and the savings also may be less than what you have hoped for and there is also no guarantee that your lender will negotiate with you.
How to Get a Student Loan Settlement
It is possible to get a student loan settlement, but the process is very complicated, just so you know. You can always attempt to settle student loans individually or with the help of a more experienced negotiator. And to do this, follow the steps below;
Make Contact
You should reach out to the company that has been in contact in regard to your defaulted loan. For defaulted student loans in question, this will very much likely be a collection agency. You should do well to contact them and ask to discuss your settlement options.
Hire an Attorney
This is one important step to take. You should select a student loan lawyer or an attorney who specializes in the business of debt settlements. You will very much likely in this case have to pay legal fees, and also you should know that lawyers cannot guarantee better savings than you normally can get on your own. One thing however is that lawyers can negotiate federal student loan settlements but may however prove to be helpful in the event that you have been sued by your private student loan holder.
Work With a Debt Settlement Company
If it is that you are still making payments, debt settlement companies will make you stop and instead fund an account with them. And once you have put enough money in the account, the firm will try to negotiate a settlement. You should however know that making use of a debt settlement firm is very risky in the sense that your loans are not already in default. Only a handful of these companies will help to settle student loans, and some lenders on the other hand will not negotiate with debt settlement companies. You should do well to check that your lender will before opting for this option.
Conclusion
If you and your loan handler have agreed on a settlement, you should make sure to get the offer in writing. And once you have paid the stipulated amount as required, you should also make sure to get a paid-in-full receipt. You will want to keep that in the event that questions regarding your debt surface in the future.
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