Outstanding student loan debt is a severe problem for a great many graduates. Although not an enviable situation, it is possible to negotiate with your creditors and perhaps reduce or even eliminate your student loan debt. If you're uncomfortable with the negotiations yourself, it may be possible to hire a company to negotiate with creditors on your behalf. However, if you are committed to and have the ability to eliminate your debt, it's generally better to liase with your creditors yourself. If you reach the stage point where you can no longer maintain the repayments, it's imperative that you contact your creditors straightaway and explain your position.
It will help your situation greatly if you manage to email your creditors before they come knocking. Professional debt negotiating programs offer you plans, they deal with your creditors on your behalf to debt consolidation services: They negotiate with your creditors provided you have saved the minimum balance to deal with the debt. Before signing on with a debt negotiation or consolidation service, it's important to check and ensure your creditors are willing to work with the agency you plan to choose. Consider using agencies that offer genuine counseling and education, instead of simply enrolling all clients in a debt management program.
Debt negotiation is a process whereby you negotiate with your creditors to pay off your debts at a rock-bottom amount. For example, if your student loan was for $22,000, you can negotiate a payoff of $7,500. Creditors might report accounts that have been reduced, and if reported, it will stay on your credit history for seven years. Note that creditors have no requirement to negotiate with you or someone acting on your behalf and that they will often play "hard ball" at the beginning of the negotiation process.
Notwithstanding the status of your finances, there are positive outcomes for both you and your creditors. Explain to them right up front what your situation is and how you believe that things can be worked out so that everyone will benefit.
The fact that that you have appointed a debt negotiator to act on your behalf is a sign that you are a poor risk. Virtually all creditors will settle for a lump sum, instead of waiting for the balance over the next 9 years or so. Steer clear of debt elimination scams that claim consumers are not under obligation to repay their debts because creditors charge illegal interest rates. This is patently untrue.
By rapidly taking matters into your own hands, your creditors will see that you mean business and are trying to seek remedy. I bet you would not have guessed it but, asking your creditors to simply forgive some of your debt is maybe one option and is a good starting up point when negotiating your student loan. Don't expect your creditors to be push overs, however! But it does make it clear to them them that you expect some action.
Consolidation versus Forgiveness
Debt consolidation is the superior of the two when it comes to influencing your credit score. If you choose a debt consolidation company, your creditors might report delayed payment.
When your monthly bills become too much for you to handle, it makes sense to use debt consolidation or debt negotiation for working out debt and credit challenges. If bills and other heavy payments are getting you down, take action sooner rather than later to find solutions to your situation. Unrelenting financial stress and burden can lay waste to everything in it's path, not to mention the detrimental impact on your credit report. If a student loan is at the heart of the trouble, debt negotiation and/or consolidation can aid in getting you back on track and clear of debt.
Barb McAllister is a financial services expert and a full-time writer for http://www.winwin-negotiation.com .