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[Date email is sent]Sender: ACCC Student Loan DepartmentSubject: Private Student Loan OptionsDear [ Client’s name]Reference no. [ Reference number] Here are some options you can explore when it comes to Private Student Loans.You can ask for an extension:Each Promissory Note will tell you how long you have to pay the debt back. Most private lenders have a term of 10 years, but the promissory note may say that you have 20 years to pay them back. They use that language so if you are struggling you can request an extension and push the 10-year term to 20 years. Your minimum payment will be reduced but you will pay more on the interest in the long run.You could refinance:Clients look into this option to try and get a lower interest rate and combine lenders into one. A Private lender may let you refinance the loan ONLY if your credit has improved since you originally took out the loan AND you’ve been trying to make good faith payments. If the loan is refinanced, they will give you a variable interest rate. We are NOT a fan of this option as you can start with a 3% interest and after 12 months could increase as high as 20%.You could consolidate all your loans into a Private loan:This could be an option if a client has both Federal and Private Loans. No, just don’t do this option. You’ll be worse off doing this.You can ask for an in-house-program:Federal loans offer income driven plans, graduated plans and other plans where all that is required is to fill out some paperwork. For Private Loans though you would call and ask if they have any in-house-programs. It is important to use the correct language. Don’t ask “I need help what can you do?”, ask “Do you offer any Income Driven Repayment Plans?”You could try to have the loan cancelled:This option is extremely difficult with Private loans. Unlike Federal loans who offer forgiveness/cancellation based on disability, fraud, where you work, Private lenders will forgive the debt if certain things in your promissory note were left out. Your lender and all their branches use the same forms thus leaving out certain things is near impossible. The things that have to be missing from the promissory note are almost the same as saying I bought a car and realized that they didn't put in the engine. The only one that seems to work occasionally is if you signed under the age of 18.If you are permanently disabled:Unlike Federal loans that can be discharged if you are considered total and permanently disabled, Private loans are more of a does your lender offer it. If you are disabled, call your lender and ask if this is something they offer.Note: Sallie Mae and Wells Fargo are the only two agencies that have been recorded offering said service.If Loans go into DefaultYou could try and do a settlement:This option usually never works when you owe this much debt. When doing a settlement, they usually want a large sum payment upfront. The average settlement is 50% of what you owe (usually all upfront).You can ask to do a Loan Rehabilitation Program:It is rare but some private loan lenders will offer a borrower to do a rehabilitation program on their loans. Like a federal loan rehabilitation program, the borrower would set up a nine-month payment plan with the lender. Afterwards, the lender will bring the loan back into good standing. Unlike the federal loan rehabilitation, it seems the negativity on one’s credit report remains unless told so by the lender.You could set up a payment plan with the collection agency:A lot of collection agencies tend to not get paid unless money is coming in the door. Because of this a collection agency may be willing to work something out with you that the lender wouldn’t.You can send a payment that you are comfortable paying:This can be sneaky as the borrower does not inform the collection agency of their intentions. The borrower would figure out how much they can afford to pay towards their private student loan in default as well as what date works the best. If the check gets cashed the borrower would repeat the process until the debt is paid off.You could look into Bankruptcy:If you have other debts this may be an option to look into. You see online everywhere that you can't file bankruptcy on student loans. This is half true. You can't file on federal loans because there are programs out there that will give you a $0 payment (Income Driven Plans). Private loans do not offer such programs so because of this it is possible to file on your private loans. Typically, if all your debt was wiped out the courts will see if you can afford the minimum payment. If you can, you are stuck with them. If you can’t, they will be discharged. Even in the event the loans are discharged there is a high chance the lender may appeal the decision. Private student loans taken out for room and board, books, or other living expenses are more easily dischargeable than loans taken out for tuition costs.Removing a CosignerA common topic that comes up during Private Student loan counseling is if it is possible to remove the cosigner from the loan. Private lenders will say that it’s possible to remove a cosigner if the following requirements are met.Borrower must submit and sign an Application Request to Release of Cosigner.Only the borrower can apply for the cosigner release. (Not Mom & Dad)Must be at an age that enables them into entering a legally binding contract.Provide proof of graduation or completion by sending a copy of the borrower’s diploma.Must be a U.S. citizen or permanent resident at the time the request is submitted.Provide proof of income by submitting borrower’s most recent W2, a printed paystub within the past 90 days, SSI or Disability award letters.Demonstrate the ability to assume full responsibility of the loans.Pass a credit review that demonstrates a satisfactory credit history. A borrower should not have:An open bankruptcyOpen foreclosureStudent loans in defaultNo 90-day delinquencies in the last 24 months on any account.The most recent 12-48 consecutive monthly payments were made on time including the first required payment.Number of consecutive payments varies per lenderWells Fargo: If the first required payment was not made on time, the most recent 48 consecutive monthly payments were made on time.Have had no student loan(s) in hardship forbearance or modified repayment program during the applicable consecutive monthly payment periods.Sallie Mae- Includes being in a Graduated Payment Plan.If you have any questions feel free to call us at 1 (800) 769-3571 Ext. 1924.Hours of Operation:Monday-Thursday 9am-8pmFriday 9am-5pmSincerely,ACCC Student Loan DepartmentAmerican Consumer Credit Counseling, Inc. 130 Rumford Ave, Suite 202Auburndale, MA 02466P.S.Don’t forget to check out CreditU, American Consumer Credit Counseling’s All-in-One Personal Finance Solution. Set goals and track progress through milestones, receive educational coaching, connect your accounts. and monitor your spending, and access a complete financial dashboard to better understand your current financial health. Coming soon, manage your Debt Management Program directly in the app! Available for iOS. Coming to Android soon.To help ACCC reach a larger audience, kindly consider subscribing to our YouTube Channel. Thank you for your support!CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure, or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Thank you.Document #: CC LT027 r(1)Effective Date: 08/24/21 ................
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