Although it can be hard to face, not being able to pay off your loan debt is something that many people have to come to terms with. If you are in this situation, then it is important that you try and sort it out as soon as possible. The longer you leave the problem, the worse it will get. If you cannot pay back your loan and need help, then here are some tips to help you on the road to recovery.
Admit defeat
If you really are struggling and cannot make your repayments, it will only harm you to carry on struggling. You will have to pay late fees or extra payments, and your debts will get worse. Do not try and cover your loan debts with other types of debt like credit cards, as you are just making the problem worse. Admit that you are struggling and start taking steps to change the situation right away.
Contact your lender
The first thing to do if you are having problems is to contact your lender and try to work out some sort of plan. Although lenders are a business, they are often sympathetic to your situation and might be able to help by deferring or temporarily stopping payments. Having your payments stopped for a few months might be all that you need to get back on track. If you can show your lender that you can solve the problems, they should be able to help you.
Pay what you can
Even if you cannot pay the full amount back each month, you should always try and pay what you can back. The debt you have is not going to go away, so paying back what you can will still help to reduce the problem, even if it is not the full amount you should be paying back. Lenders will look more favourably on you if you are seen trying to pay back as much as you can.
Seek advice
If your problems persist, then seek some independent financial advice to try and help you through the problem. There is free advice available, and it could help you to learn where you are making mistakes that you could change in order to pay back more of your loan amount.
If the worst happens
If the worst happens are you are forced to sell your home or are taken to court, try and deal with the situation properly. Although this is obviously a very hard time for you, make sure you keep a level head, and respond to all paperwork and requests promptly and accurately. Although the situation may seem bad now, if it helps you to become free of debt it will be worth it in the long-term. If you cannot pay back your loan, then seek advice and help, and always pay as much as you can do each month.
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February 23, 2012
I receive e-mails every week from people who have had the misfortune of receiving a summons notice on their doorstep or the joy of having a stranger sidle up to them and say, “You’ve been served.”
Not fun. Oftentimes, these same people tell me that the first thing they did was to pick up the phone, call the collection agent or collection attorney in many cases and try to work out a payment plan or settlement agreement. This is WRONG, WRONG, WRONG.
Once you have been served a summons, this means that the collection agency is SUING YOU. You are being sued and the collection agency is now the Plaintiff and you are the Defendant. Any and ALL communication with the Plaintiff should be done via written correspondence only.
It’s too late for “I’ll send you $50 buck a month, I promise.” Way too late. Now is the time to take responsibility for your financial future and face your fears (debt) head on. Even if the collector was to agree to a payment plan, they cannot be trusted. While you are “working it out” they could be in the process of putting a lien on your property and searching for your bank account information in order to seize your assets.
Here’s what you need to do. First of all, DO NOT BE INTIMIDATED. This is difficult, after all I’m sure you feel badly about the debt in the first place and it’s probably been haunting you for years. The sad truth is that many of these debt lawsuits are brought about on out-of-statute debt and the collection agencies and debt attorneys are notorious for re-aging the DOLA or Date of Last Activity on your credit report. It’s in your best interest to dig up any old credit reports and bank statements to prove the the date of the last payment you made on the defaulted account. If that date is past your state’s statute of limitations on open credit card debt, they have the right to try and collect, but they cannot sue you and must drop the lawsuit.
Additionally, very rarely is a debtor sued for the actual amount they owe…penalties, interest, and other assorted fees are generally tacked on to the balance. Make them prove their case!
There are many other defenses that can be raised against one of these collectors. The key is that you need to communicate with them through the court system. They don’t expect you to fight back, over 96% of debt lawsuits end in default judgment. The chances of them backing off and dropping the lawsuit are HUGE if you take the time to properly format what is called a Notice of Appearance, Answer, and Certificate of Service.
It takes some time and research to properly file these documents, but it’s your financial future at stake. A default judgment can not only freeze your bank account or garnish your wages but it will also ruin your credit for a minimum of 7 years. A few states offer basic templates for the forms you will need to file with the court, a simple Google search should offer up some resources. You can purchase Word templates (w/ affirmative defenses for third-party debt collectors) for the “Answer to Complaint” document and more at www.IHaveBeenServed.Info and alternatively there are very helpful people on several internet “debt” message boards who can offer up advice when drafting your own documents.
Additionally, you should fax and mail (certified, return receipt) a Cease & Desist Letter to the creditor informing them that they must communicate you with via written correspondence only and now that they know how to communicate with you they must refrain from contacting any of your neighbors, friends, relatives or employees in an attempt to collect their debt. If they violate your request, you can threaten to sue them for an infraction of the FDCPA (Fair Debt Collection Practices Act) which allows $1,000 for each violation.
Now is the time to action. If you do nothing, the creditors will find your assets and take them. Bottom line. File your Answer and other supporting documents and wait and see. The best that can happen? They won’t want to fight you in court and drop the lawsuit (they rarely have the supporting documentation to back up their claims) or you’ll receive a courtdate and you’ll be given the chance to work out a settlement agreement at that time. Either way you will have avoided a default judgement which is looked upon as poorly as bankruptcy in many cases.
Fight back! You have nothing to lose and everything to gain.
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February 15, 2012
There’s over millions of dollars in free grant money that is given away to everyday people through various government and private foundations. These are not to be confused with loans. That’s mainly because the money you are awarded by submitting a grant application never has to be paid back.
This free money was budgeted for through tax payer dollars and tax incentives provided to organizations, and it allows American citizens to obtain cash grants for their personal use.
Applying for some of this free government grant money and private foundation grants can be done by searching the online grant database program. There you’ll find many of the available programs with various funding amounts. Just review the eligibility requirements and qualifications to see if you feel you match the criteria for receiving these funds.
Often times many people can be awarded money for the same grant, so it doesn’t hurt to submit an applications. There is also no limit on the number of grants you can apply for or receive. If you feel there are a number of programs you can qualify for, then you are free to apply for all of them.
As a result, you could receive as much as $50,000 to build your own business, $13,000 to pay your bills, or even $19,000 to help you pay for school. There are hundreds of grant programs for various reasons. Single parents, college students, minorities, and many other groups may qualify to receive some of these funds. Once your application is reviewed and accepted, you’ll receive the cash grant you need that never has to be paid back.
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February 6, 2012
There are three possible ways to reduce your student loan payments, provided you are making monthly payments to the U. S. Department of Education student loan programs. This article will focus on the “General Forbearance” as the main tool to reduce your student loan payments.
1. You Can Request A Forbearance.
2. You Can Request Student Loan Consolidation.
3. You Can Change Your Student Loan Repayment Plan.
Types Of Forbearance:
Having trouble making those student loan payments? You may qualify for a student loan forbearance. A lot of people think that you either have to be in the military or be completely financially destitute to qualify for a student loan forbearance. Not True! ANYONE with trouble making the payments may qualify for a “General Forbearance,” provided your student loans are held and managed by the U. S. Department of Education.
Listed below are the four types of forbearance options and their requirements.
General Forbearance: This forbearance allows you to postpone or reduce the amount of your monthly payment for a limited and specific period of time.
I will also note here that the “General Forbearance” allows to you to skip all payments for one year and may be annually renewable for as long as you qualify. You can also use the “General Forbearance” to simply reduce your payment. You can cut your payment in half, if you so choose.
Americorps (CNCS) Forbearance: This forbearance allows you to stop payments temporarily if you are serving in an approved national service position. The forbearance form must be certified by the Corporation for National Community Service (CNCS).
Internship/Residency Forbearance: This forbearance allows you to postpone or reduce the amount of your monthly payment for a limited and specific period of time if you have been accepted into an Internship/Residency Program.
Loan Debt Burden Forbearance: This forbearance allows you to postpone or reduce the amount of your monthly payment for a limited and specific period of time if you provide acceptable documentation showing that your monthly payments for eligible education loan(s) exceed 20% of your total monthly gross income.
Teacher Loan Forgiveness Forbearance: This forbearance allows you to postpone your monthly payment for a limited and specific period of time while you are performing qualifying teaching service as a teacher in an eligible elementary or secondary school.
If you write your monthly checks to the U. S. Department of Education, you may apply for a “General Forbearance” at: http://www.dlssonline.com
Student Loan Consolidation:
You can also go to the same site to have you your student loans consolidated, provided you have U.S. Federally Subsidized loans and you are currently making your payments to the U.S. Department of Education.
The interest rate for a Direct Consolidation Loan, is the weighted average of the interest rates on the loans being consolidated rounded to the nearest higher one-eighth of one percent. As of this writing, the current rate is somewhere around 6%.
Student loan consolidation can be very tricky, therefore I suggest you call the consolidation hotline 1-800-557-7392, to estimate your weighted average interest rate and to see what your loan payments might be.
Change Your Student Loan Repayment Plan:
If a forbearance or loan consolidation is not for you, you can always choose to select a “Graduated Repayment Plan” which can also be very low for the first couple of years. Either way, you don’t have to starve to death to make those payments. Once you have your PIN number, you can simply go here: http://www.ed.gov/DirectLoan
… and you can change your payment option to “Graduated Loan Repayment Plan” to get the lowest possible monthly payments. That’s all there is too it!
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December 11, 2011
Many people consider an education to be the vehicle to the future – a way to fulfill their professional and personal dreams. Travel, family, owning property, wealth, opportunity and happiness seem more attainable with an education.
And yet, many students finish their education feeling cheated. They are left with a piece of paper, a massive job hunt and often more than $20,000 in debt. This can be discouraging. What many students don’t realize, however, is that they don’t have to be controlled by their student debt. In fact, they can control the purse strings.
Consolidating student loan debt is one way that many young people are using to take control of their financial future. They already have the education and now they need to move forward in a positive way.
Normally, with debt consolidation people are able to combine all of their debt, including credit cards, lines of credit and loans, into one big loan. This can result in lower interest rates and savings, as well as less stress and hassle.
With consolidating student loan debt, there are some added benefits:
1. While with most debt consolidation programs, a person is required to qualify based upon their credit rating, student consolidation programs don’t. So, even if you have a poor credit score, you are able to access the benefits of debt consolidation.
2. While some people may be restricted in terms of the amount they can receive in one loan to consolidate their debt, student loan debt consolidation typically has no maximum amount.
3. If money is ever tight, with student loan debt consolidation, people can postpone repayment until graduation or until they get a job.
4. With student loan debt consolidation, the debt is usually discharged at the death of all borrowers. So, you won’t be leaving an unnecessary burden behind on your co-signers or family members.
5. Everyone loves to save money on taxes and with student loan debt consolidation the interest you pay may be tax deductible.
So, if the amount you owe the bank for your education is getting out of hand or you’ve just graduated and you want to make repayment easier, a good student loan debt consolidation plan could be right for you. Check into local financial institutions and consider seeing a credit counselor to help you.
Resorts Family
December 8, 2011
If you are a home owner who is having to borrow from Peter to pay Paul every month due to a mounting debt load, a debt consolidation home equity loan may be the answer. A debt consolidation loan will allow you to consolidate your high interest credit card and consumer loan debt into one low rate, affordable monthly payment.
A debt consolidation home equity loan is a secured loan. It is important for you to know that your home will be used as collateral which means the lender will have a lien on your home until the loan is paid off in full. None the less, if you are drowning in a sea of debt, a debt consolidation loan can give you a new financial start. It can help you avoid bankruptcy as well as end harassing creditor phone calls. In addition, in most cases, your monthly payment will be significantly lower freeing up cash that can be used for a retirement savings plan, to fund a college education or to just save for a rainy day.
It is important that once you obtain your debt consolidation loan you refrain from running the tab on the recently paid off credit cards back up. If you do not think you will be able to resist the temptation then you may want to consider cutting up your credit cards and closing out the accounts. If not, you can quickly find yourself in a situation that is worse than before you consolidated your debt!
Another benefit of a home equity debt-consolidation loan is that the interest you pay on the loan may be tax deductible. You should consult your tax advisor regarding your particular situation but in most cases as long as the combined 1st mortgage and new debt consolidation loan do not exceed 100% of the value of your home the interest will be fully deductible.
Most lending institutions these days offer home equity loans that can be used to consolidate debt so you should not have a problem finding a lender to facilitate your loan needs. You will also find that there is an abundance of information on the internet about debt consolidation home equity loans. Two very informative sites that you can visit for more information on the various type of home equity loan debt consolidation loan programs available and the lenders who offer them are http://www.equityloansource.com and http://www.badcreditloanshop.com .
Chewable
December 7, 2011
What makes this picture more complicated is, that normally one student loan is not enough to finance the education, but a student will take several loans from several lenders, both private and federal ones.
This leads to a situation, where a student will have several loans from several lenders, each having their own back payment schedules, interest rates and other terms. When the back payment time is closer, a student may see the situation complicated and starts to think about the student loans consolidation.
1. What Does The Student Loans Consolidation Mean?
The student loans consolidation process means, that a student, or now a graduate, will consolidate all his loans into one loan. This happens so, that all old loans will be paid away with the new loan. However, the private and federal loans cannot be combined.
So the new loan just simplifies the loan management, but does not decrease the monthly payments. If this is needed, a graduate must also renegotiate the back payment schedule to be able to get the monthly payments, which he or she can pay.
2. The Better Credit Score Can Decrease The Interest Paid.
When the student debts were originally taken, a student may have had worse credit score, which has increased the interest rate of his loans. Now, when he has graduated and may already work, he has a chance to get better credit score, which means an immediate decrease of the credit score, and thus lower monthly payments.
3. You Can Consolidate With Your Spouse.
Yes, the student debt consolidation can be done also among spouses, but this is not generally recommended. One reason is, that if you divorce, you still have to pay the student loan.
4. Where Can You Consolidate?
Most federal loans can be consolidated, such as FFELP and FISL and also most private loans. Usually the banks and other lenders offer so called consolidation options, but you can walk straight to the Department of Education to handle the issue. Note, that both the student and the parents can avail the student debt consolidation.
5. The Main Advantages.
Usually the monthly payments of the consolidated loans are lower than those of the original loans. This is also a flexible solution, because you can change the interest rate from a variable one into fixed one or to lengthen the payment time from 10 years to 30 years to make the monthly payments lower. You can deduct the interests in the taxation and to pay more than the schedule without any penalty.
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December 6, 2011
Knowing exactly where to start looking for consolidation programs that help you get a handle on your college student loans is the first step to getting debt free from your education loans. There are two major programs that the federal government makes available to student loan borrowers to combine debts and lower monthly repayments. And, new recent enhancements to these federal student loan consolidation programs are making them attractive options.
The benefits of consolidation are important. Only one lender and one monthly payment. Payments made by electronic payments keep your credit rating pristine by not even giving you the option to miss a bill. The new Income Contingent Repayment (ICR) plans have options which could help get your loan excused after a specified period of making timely payments.
Consolidation programs available from the federal government include:
DIRECT LOANS — Direct consolidation by the U.S. Department of Education. Borrowers make payments directly to the department. Most favorable terms.
FFEL LOANS — The Federal Family Education Loan (FFEL) program. While FFEL finding is subsidized and supported by the U.S. government, these are in reality made by private lenders, such as your bank or your credit union. Therefore, your FFEL consolidation is repaid directly to the private lender who originated your paperwork, unless that lender has re-sold the note. In that case, you make your payments to the new entity.
Getting a Direct or FFEL consolidation loan depends on which option you originally took out to attend college.
In either case, the repayment (equaling the total amounts you’ve borrowed, the interest rate on the notes, and other features not listed here that you’ve already agreed to) will almost certainly be structured in a similar manner.
General Requirements:
The following federal college loans are eligible for consolidation:
Subsidized and unsubsidized Direct and Federal Family Education (FFEL) Stafford Loans
Direct and FFEL PLUS Loans (aka “parent loans“)
Federal Perkins Loans
Federal Nursing Loans, and
Health Education Assistance Loans.
However, you need to keep in mind that private educational loans are not eligible at this time.
A student loan borrower is free to get an FFEL consolidation during any of these three different time periods:
1. During your grace period after completing college
2. At the time you are in the repayment phase, or
3. During any qualifying periods when you have been granted a deferment or forbearance.
Therefore, as you can see, there is always an opportunity to get relief from mounting bills.
To apply you should contact the consolidation department of a participating FFEL lender for an application or more information.
For students still in school, the avenue exists that they you will still qualify for direct consolidation loans.
But beware that if you have defaulted on your student loan, there are a number of very specific requirements you must meet before you can get them consolidated to a more manageable sum. This is why it’s critically important that you avoid default.
The interest rate you wind up paying by consolidating can easily be found with this online calculator at http://www.findhow2.com/free-loan-calculator-for-personal-loans.html
Maximum length of consolidation is 30 years. You can make monthly or quarterly payments. And there are no fees or early pre-payment penalties.
To apply, call 1-800-557-7392. (TTY users for the hearing impaired phone number: 1-800-557-7395)
Or, you can apply free online at: https://loanconsolidation.ed.gov
New rules announced to federal student loan consolidation programs now offer you some of the best options to get rid of student loan worries and find better terms to pay off student loans.
Gaining access to these critical consolidation programs should be your first stop as you attempt to become free of loans you took out to attend college. Others have done it and so can you.
Business Briefcase
December 2, 2011
What are Student Loans?
Student loans are made to students attending college or other higher education institutions to help them pay the fees of tuition, materials, and cost of living. They are different from other types of lending in that you need to be attending or planning to enroll in a college to be able to be eligible for one. Repayment terms and interest rates are also typically different from conventional loans. All payments on the loan, including interest, are deferred until the student has left college. Usually repayment begins 6 months to 1 year after a student has left college, whether the student has graduated or not. Rates on student loans are also typically lower than those on conventional arrangements by at least 2 percentage points.
Am I eligible for a Loan?
The vast majority of college students in the United States should qualify for some sort of education financing. The amount they are able to borrow varies dependant on their earnings, their parents’ income along with other financial factors. All of these considerations will probably be weighed by the financing company to ascertain how much the student may borrow.
Which Organizations Offer Student Loans?
Until recently, student loans came from two potential sources: the federal government, or financial institutions. Following the introduction of the Health Education Reconciliation Act of 2010, the Federal Direct Loan Program is the only government-backed education lending program in the U.S.. Within this program, the borrower and / or the student’s parents borrow right from the government through the Department of Education. The Department of Education may use a private organization as the loan servicer. The servicer is the single contact the borrower will have for everything associated to payment, even in cases where the borrower has acquired Direct Loans at several educational facilities. Private student loans are made by banks and also other private finance companies. They are always more expensive than government funded borrowing, in regards to interest rate and fees. Students should certainly make certain that they have already reached their limit of government funded loans before applying for private student loans.
Private loans tend to be quoted at some foundation interest rate, such as Prime or perhaps LIBOR, as well as some further percentage. Some student lending web-sites advise looking for a loan cited at LIBOR plus, since the difference between the Prime Lending Rate and LIBOR continues to increase over time. Over the long run a loan determined by LIBOR will likely be less expensive when compared to an equivalent loan based on the Prime Lending Rate. One more issue to understand when examining private student loans is the fees billed for the loan – high fees will drastically add to the cost of the financing. A loan which has a relatively low rate but high service fees might eventually cost more than a loan having a rather higher rate but no fees.
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November 29, 2011
Use Free Government Grants to Pay Student Loans
You can get relief in many ways if you are not able to pay off your student loan. You can get free government grants to pay student loans if you consolidate the loan which will also reduce the total student fund as the interest will also decrease. It is important to apply for consolidation of the student loans early and you can do it in your college. You will have to fill the forms for getting debt relief for the student loans.
All the student money which you have taken has to be combined when you ask for the government grants money for paying the loan, this decreases the student loan debt, by decreasing the monthly interest. The form which has to be filled for this is very much same as the forms used for applying for money for education.
You will have to fill in a few details to get debt relief for your student loans like your:
o collecting loan information
o student history
o your job history
o future payoff expectations
The financial aid from the government will help you in a number of ways such as:
o paying off student education loans
o reducing your overall debt load
o allowing you to study further
o working in your new job.
It is very essential to give a reason why you cannot pay the money that you have taken out. There can be many reasons such as:
o sickness
o unemployment
o low employment
o other financial reasons why you can’t pay your student loans
Debt consolidation is free government money which helps you clear the funds which you have taken for studying. You may be told not to pay back the student loans and this is like free government money.
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November 28, 2011
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