When times get rough and you have lost track of your finances, loan and credit card payments could get totally overwhelming. This is especially true for those who have previously got private student loans while still finishing a college degree.
A student loan is a type of loan specifically designed for students to pay off their tertiary education costs and other related fees such as tuition, books, school supplies, and living expenses.
The primary distinction of a student loan from other types of loans is that it has substantially lower interest rates and a deferred repayment schedule while the borrower is still in school. The intention of this type of loan is to make university more accessible to all and the prospect of repaying the outstanding balance once you finish a degree and start earning.
Between the two types of student loans, the private student loans are more expensive than federal student loans. Although traditionally unsecured, private student loans are increasingly secured, so that the borrower must offer collateral or a third-party guarantee of repayment.
But making repayments for private student loans can be difficult, especially if you are starting with your first job and your earnings do not support more expenditures.
Reduce the Private Student Loan Burden
There are several options for you to lessen the burden of your private student loan. One way is to reduce the amount of repayment through refinancing or consolidating your private student loans at a lower interest rate and/or longer period of installment payments.
Before refinancing can be granted, your lender would normally look for three things: your credit score, debt to income ratio and availability of steady income. This option is obviously best for borrowers who are creditworthy, especially now that banks are offering low rates for private loan consolidation.
You can also negotiate the reduction or dismissal of the principal amount of your private student loan through a debt settlement program where a debt settlement firm will try to enter into a negotiation agreement with your creditor.
The negotiation with the creditor can be done personally, though it is difficult, considering that it can get very intimidating sitting with your lender. But you can hire reputable individuals or firms who have developed through the years several strategies to deal with the lenders and make a successful negotiation more likely.
On the other hand, a temporary fix of your private student loans can also be made by asking your lender for forbearance or deferment of the loan repayment.
Hire a Debt Attorney for Private Student Loan Negotiation or Settlement
In order to successfully convince your creditors to reduce repayments or the principal balance, you are tasked to do the hard way—convince the lender that you cannot afford to fully pay the private student loan and that they will get something out of the negotiation, such as a lump sum payment.
There are many options that are available for you to try, but bear in mind that nothing guarantees success in the settlement of private student loans.
To help you negotiate with your lenders, especially if you owe a large amount of unsecured debt, you can hire the help of a debt settlement attorney.
A debt attorney, especially an experienced one, knows the best strategy to minimize any legal risks, as well as risks to affect your credit score. Also, a debt settlement lawyer can provide better options that could lower your debt without costing more than what was originally owed in the long run.
Cost of Debt Settlement Lawyer
A debt attorney usually works on fixed fees while others work on an hourly basis. But before you engage the services of a credit lawyer, you can already get an idea as to the total cost that you would incur at the end of the engagement.
The cost for hiring an attorney to negotiate with your creditors would usually depend on the scope of work, the type of debt to be settled and the difficulty of the debt settlement proceedings.
Many debt settlement lawyers also charge based on contingency. It means that you need not pay upfront for the services but the lawyer will take a percentage of the total amount of your savings upon settlement or negotiation of your private student loans.
Hiring a debt attorney could cover different stages of the negotiation which would affect the amount with which you will charge. A debt lawyer can be hired to handle the entire negotiation phase until the settlement of the private student loans.
The credit attorney can also perform specific tasks related to the negotiation process, which is called unbundled service. Through this, you can only delegate technical aspects of debt settlement to the lawyer, such as the drafting of settlement proposal, and do the easier tasks by yourself.
Contact us if you’re considering settling our renegotiating your private student loans. We have extensive experience dealing with creditors.
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