![]() If a student loan settlement seems like the right fit for your situation, follow these four steps: Also note that the difference between what you owed and paid could be taxed as income. Late payments can stay on your credit report and continue to impact your credit score for up to seven years.Īdditionally, the debt will be marked as settled instead of paid in full, which might also hurt your credit and make it hard to access credit from other lenders in the future. Keep in mind: While a successful settlement means you’ll have one less debt to worry about, the negative impact to your credit from missed payments won’t just go away. But if you have a student loan in default, a debt collector might be willing to cut their losses and accept a lesser sum to clear the account. However, not all lenders or collections agencies are willing to negotiate settlements, especially if you’re not too far behind on your bills. If the loan holder agrees to a settlement, you’ll typically have to make a lump-sum payment to resolve the debt. How much a student loan settlement could save youĪ student loan settlement is when you negotiate with a loan holder to settle the debt - sometimes for less than what you owe.Here’s what you should know about student loan settlement: One potential strategy to consider is negotiating a student loan settlement with your loan holder to clear your balance. There are a few ways to get a student loan out of default. Once you miss payments for a certain period of time - 270 days for most federal loans and 120 days for most private student loans - your loan will enter default. NMLS # 1681276, is referred to here as "Credible."Īfter missing a student loan payment, your account will be considered delinquent. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Our goal is to give you the tools and confidence you need to improve your finances.
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