| For starter, what is defaulted student loan? This is a | | | | single consolidator. When that is done, the loan |
| condition where you fail to repay the loan or apply | | | | collectors will stop their harassing phone calls and |
| for deferment or forbearance for at least 270 days | | | | reminders. And finally, you can earn back some peace |
| for federal student loan and 120 days for private | | | | and quiet for your life. |
| student loan. | | | | Once your consolidation is done, your credit score will |
| When your student loan is defaulted, your loan will | | | | be improved. However, the default notation will |
| become due immediately and you have to pay for it. | | | | remain in your credit report for 7 years but at least |
| Besides that, your loan will turn to the collection | | | | you are entitle for other loans application and you |
| agency where you have to pay for the collection | | | | stand a better chance for job application as well (bad |
| cost. And please be reminded that this cost will range | | | | credit can seriously affect your employment). |
| from 20-25% of your loan balance. And if that is not | | | | When you are in consolidation, please know that |
| bad enough, the Department of Education can ask | | | | consolidators offer various repayment plans to help |
| your employer to forward 10-15% of your income to | | | | you clear off the debt. Each of this plans have their |
| pay for the loan. When that happens, you might be | | | | own pros and cons. If you are in a career that starts |
| so heavily in debt that you have to announce | | | | off with low income but increases gradually, you |
| bankruptcy. | | | | might want to take the graduated payment plan |
| What can you do is to look at defaulted student | | | | where you pay $25 as the minimum monthly |
| loans consolidation. The federal government has | | | | payment. Or you can look into the extended |
| designed the Federal Family Education Loan Program | | | | repayment plan where you can spread your loan to |
| (FFELP) and the Federal Direct Consolidation Loan for | | | | 30 years. |
| your financial aid. If you want to consolidate your | | | | Although it may seem that you are paying lower |
| defaulted private student loans, you can always talk | | | | monthly payment with consolidation, you are actually |
| to the various private loan consolidators out there. | | | | paying more than you are supposed to at the end of |
| Remember to look for the institution that offers the | | | | the loan period. So, it is wise that you can channel |
| cheapest interest rate. | | | | more money into the consolidation and clear it off as |
| When you have consolidated the loans, your default | | | | soon as possible. And since a lot of consolidators |
| status will be renewed and your loans will be seen as | | | | have removed their pre-payment penalty, you are |
| fully paid. So, instead of dealing with multiple | | | | free from any punishment when you settle your |
| companies, you only focus your payment to one | | | | debt early. |