Negotiating a student loan payoff allows you to settle your debt for less than the amount you currently owe. There’s one catch: you have to fall behind on payments and damage your credit score before settlement becomes an option.
Student loan settlement is possible, but a settlement for pennies is unlikely. Depending on whether you’re looking to negotiate a payoff for federal student loans or private student loans, you’re going to need a significant amount of cash for a lump sum settlement or enough money to make monthly payments over a short period of time.
In this post, I’ll cover what http://yourloansllc.com/title-loans-az to know before negotiating a student loan debt settlement, as well as some alternatives if it doesn’t make sense for you.
Disclaimer: Although I am a student loan lawyer, this article contains general information and should not be taken as legal advice. If you want legal advice that pertains to your specific situation, you should schedule a free 10-minute consultation with me.
What is a student loan settlement?
A student loan settlement is when the loan holder agrees to accept less money than you currently owe after you’ve missed payments for several months.
- Lump sum settlement – you make one large payment to settle your student loan debt for less than the current balance. You usually get the biggest discount with this type of settlement agreement. (more…)