How To Negotiate Student Loan Settlement
Although it was the plan to forgive student debt, many people still have a balance due. With the cost of living on the rise, many may find it hard to find the extra income to pay back their student loan. The expenses of daily living, such as mortgage or rent payments, utility bills, and auto loans may take priority before student loans.
Failing to make payments on your student loans can hurt your finances in more ways than one. If you’re having trouble making payments, you may want to consider an alternative approach, such as negotiating a student loan payoff with your lender and trying to settle for less than you owe. CuraDebt, a debt settlement firm, is available to assist with the negotiations of your private student loans.
Some reasons that you might want to consider a student loan settlement are, but not limited to:
- Your loans are in default or are at risk of being in default.
- You have a lump-sum payment to settle your outstanding debt.
- Your loans have been sent to collections.
- Your credit is already damaged.
- The alternative is a court judgment.
If you are behind on your student loan payments but have a lump sum of cash saved up, it might be worth pursuing debt settlement. We can talk to your lender to see if settling your loan balance for less is an option. If you do not have a lump sum saved up, we can help! We will set up a special purpose savings account for you, and each month you pay an affordable amount into this account until enough has been saved up to negotiate a settlement.
What is a student loan settlement?
Student loan settlement is when you settle your student loans for less than the amount you currently owe. If your loans have already defaulted or if they are at risk of defaulting, and you have a chunk of cash saved up, your lender might be willing to negotiate a settlement agreement. If you do not have savings, do not be discouraged. CuraDebt can help you set up a special purpose savings account. Each month you will put an affordable amount of cash into this account, and once the balance is at an appropriate amount, we will contact your lender to negotiate a settlement. Lenders may be willing to accept a settlement offer when they feel it is the only way you will be able to pay off your outstanding debt.
You may qualify for student loan debt settlement if:
- You can’t afford the loan.
- You haven’t paid your loans in almost a year.
- You’ve defaulted on the loan.
Most private student loans default after 120 days of nonpayment, though this varies by lender. If we can show your lender that you don’t have enough income or assets to pay back your loan, they may be willing to accept a settlement offer.
How to settle your student loans
Before we begin negotiations, your loans will probably need to be either in default or near default. Some lenders may suggest an alternative repayment plan, but if your loans are far beyond hardship assistance, we will begin trying to negotiate a student loan settlement.
1. Gather needed documentation
We will ask you to gather any documentation that might serve to show the hardship that you are currently experiencing.
This documentation might include:
- Tax returns
- Proof of recurring expenses
- Medical bills
- Childcare expenses
- Rent or mortgage payments
Any bill that currently accounts for large portions of your discretionary income can serve as evidence to prove your current situation is unarguable.
2. Know your options
Your private student loan settlement options depend on your lender. The longer you go without making a payment, the less you might need to pay when you request a student loan settlement.
How much money settling your student loans can save you depends on several factors, such as:
- How much you owe
- Outstanding collection charges and late fees
- How far behind you are on payments
Sometimes, a settlement waives the late fees, collection costs or a portion of your interest. In some instances, we can get a small percentage of your principal balance waived as well.
3. Request a paid-in-full statement
Since this is outside of your normal payment plan, we will need to handle a settlement carefully. We will get an offer in writing and review the terms with you. Once your debt is paid in full, we will request a “paid-in-full” statement as part of your terms.
Let CuraDebt Negotiate on Your Behalf
With us, you never have to worry about dealing with stressful lenders again. We will negotiate with your lenders on your behalf. We have helped many people who are in the same situation as you. Call us today for your free consultation. 1-877-850-3328