How to Settle Private Student Loans

Do you want to learn how to settle private student loans? If this is true for you, then you are on the right page. You just can and may be able to settle private student loans for less than what you originally owe if it is that you are in default and also that you cannot repay them.

How to Settle Private Student Loans

How to Settle Private Student Loans

When it comes to settling your private student loan debt, you should not try and force it. This will make you damage your credit severely. And collection costs can and will be included in the amount that you owe and the savings might even be way less than what you had hoped for as there is also no guarantee that your lender might even get to negotiate with you.

Reasons for Private Student Loan Settlement

It is true that settlement for defaulted private student loans is very common just because lenders in question do not have the collection leverage of their federal counterparts on the other end. With that being said, you should know that a private lender may accept a settlement if the following instances are met;

You Have Little To No Income or Assets

Your loan holder will very much likely make its own decision based on its perception of your ability to pay back. You will however need to show or give reasons why it will not be able to get much money from you in the future such as in the case of suffering from a long-term financial hardship.

You Have a Strong Legal Defense

Holders of private loans can force you to repay just by suing you. And in most states, if your loan holder gets to win a court judgment, then it could gain the ability to garnish your wages or even take money directly from your bank account.

But if on the other hand, you can prove in court that the statute of limitations on your student loans has expired or that the debt is unenforceable for any other reason, you could get to force a settlement or even a dismissal of the debt.

Ways to Settle a Student Loan Settlement

You can make an attempt in settling your student loans on your own or you can do so with the help of a more experienced negotiator such as a lawyer or a debt settlement company.

Make Contact Yourself

You can reach out to the company that has been in contact regarding your defaulted loan. This will very much be a collection agency for defaulted student loans. You should contact them and then ask to discuss settlement options.

Hire the Services of an Attorney

Select a student loan lawyer or an attorney that specializes in the settlement of debts. Yes, you will have to pay for legal fees, and lawyers also cannot guarantee better savings than what you can get on your own. Attorneys as you should know can negotiate federal student loan settlements but may however prove to be most helpful in the event that your private student loan holder has moved to suing you.

Work With a Debt Settlement Company

If it is that you are still making payments, debt settlement companies will make you stop the payments and then fund an account with them instead. And once you have put enough money in the account, the firm will try to negotiate a settlement with your holder. You should however know that making use of a debt settlement firm is risky especially in the case that your loans are not already in default.

Only a couple of these companies help to settle student loans and some lenders on the other hand will not even negotiate with debt settlement companies. With that being said, it is very important that you check that your lender in question before opting for this option.

And if it is that you and your loan holder get to agree to a settlement, you should get the offer in writing. And once you have paid the said amount that is required, you should make sure that you get a paid-in-full receipt. You also will want to hang on to that in the event that questions about your debt arise in the future.



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