Private Student Loan Relief

While there are a multitude of programs designed to eliminate federal loans, the options available for private loan debtors are limited. Popular forgiveness programs, like Public Service Loan Forgiveness for Teachers Loan Forgiveness, are not available to private loans. Therefore, if you borrowed from a private lender, you can face challenges when getting rid of debt. Yet, there are several methods of Private Student Loan Relief. Modification, Student Loan Refinance, or Discharge are examples of solutions available to debtors in need of financial assistance. We help you get familiar with the details of those programs in subsequent sections to find the best one suitable for your conditions. 

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Understanding every detail of those programs can be challenging as they use some terms that only experts pay attention to. Considering that there are only a few solutions for private loan holders, missing any opportunity can bring you negative results. We want you to maximize your chance when applying to any of those programs. Therefore, our experts are ready to lend you a hand to go through the application process smoothly. With our help, you will collect more information about the available Private Student Loan Relief plans and be able to choose the most useful one. We will also ensure that you do not lose your chance because of any misunderstanding or technical mistakes. You have had enough. Get expert help to wake up to debt-free mornings finally. 

Available Private Student Loan Relief Plans

Private loan holders usually dream about the total cancellation of their debts through forgiveness. As mentioned before, there is no forgiveness program available to private loans currently. However, you can enjoy the benefits of cancellation or discharge opportunities under the forgiveness concept. Also, debtors can find alternative ways to eliminate their debt or at least receive some conveniences for payment.

Discharge Opportunities

Though you cannot benefit from forgiveness opportunities, there exist discharge programs that private loan borrowers can enjoy. Usually, these programs are available because some lenders or educational institutions mismanage. They either do not fulfill their promises or engage in fraudulent activities. In these cases, the borrowers become victims and get a chance to eliminate their debt.

One of such Private Student Loan Relief programs is for the borrowers of Navient. This company services loans to more than 12 million people. However, there are allegations that it did not perform its obligations properly. Allegedly, Navient deceived borrowers, harmed their credit, or created intentional obstacles for repayment. Therefore, debtors who got loans from Navient can file a complaint and get a discharge. Besides, there also exist many school-discharge programs. They usually offer benefits to students who were studying at an educational institution at the time of its closure. Victims of school disclosure can get rid of their student loans.

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Modification Method

This method does not offer a complete Private Student Loan Relief, yet it can be helpful. If you face problems in repaying your debt, using this method should be your first attempt. Generally, modification means you change some conditions of the loan repayment. These changes can include lowering the interest rate or prolonging the repayment period temporarily. Through this, debtors can at least disburden themselves from impossible monthly payments. 

People in need of Private Student Loan Relief should contact their lenders or loan servicers to explain their challenges. If they are lucky, lenders will agree to change the terms. After all, they want their money back and keeping you in the same conditions will not guarantee their money back. However, modification of your debt terms is not a mandatory responsibility of a lender. Therefore, if they do not want to deal with your problems, they will reject any further changes. 

While we understand that the success of this method is questionable, it is still better than keeping quiet. If you do not inform your lender and miss the payment for 120 days, they can punish you with fees or demand the whole debt amount back. For these reasons, it is advisable to contact your lender or loan servicer. Ask them for a temporary modification as soon as possible.

What Should I Ask for?

The Private Student Loan Relief provides several ways for debtors to get some reprieve. One way is to reduce interest rates. This way, your monthly payments will be lower than the original. In general, you will also pay less interest to the initial debt. Hopefully, this reduction will be helpful to you. 

However, many lenders might not agree to make such a change. If it does not, you can also ask for prolonging the repayment period. A more extended repayment schedule has both benefits and drawbacks. On the one hand, your monthly payments will reduce, and you can save some money in the short term. However, as you need to make more monthly payments, this method does not save you any money in the long run. Another way of modification is by asking for forgiveness. Yet, we wouldn’t have too high hopes, as lenders have no incentive to cancel your debt.

Process Details

You need to seriously work towards making the most of the modification opportunities. First, as mentioned earlier, act fast. If you are not able to make payments, immediately inform your lender that you have a probability of default. As they avoid such cases, they might approve small modifications. If this Private Student Loan Relief does not work, look for Student Loan Refinance opportunities. Refinancing is usually better than modifying the terms. We will discuss this in more detail later. Lastly, do not forget to talk to an expert or a lawyer before negotiating the details of the change. Sometimes people can get very excited or stressed and agree to some actions that will put them in an even worse situation in the future. Be prepared to negotiate.

Refinancing

Another method for Private Student Loan Relief can be refinancing. It allows debtors to take a new loan, which has a lower interest rate. In other words, Refinancing happens when a private lender consolidates your debt. It is an excellent opportunity for people with private loans than with federal loans. When you use this method for your federal loans, you can lose your chance to get the benefit of forgiveness programs. However, as there is no forgiveness program for private debt, you can enjoy refinancing with peace in mind.

How Refinancing Works?

When you borrowed initially, you were a student with a low credit score. That is why you might have got student loans with high-interest rates. However, by the time you improve your credit score later in life, refinancing or getting a new loan can bring you a lower interest. Plus, in some cases, you can also decide whether you want a fixed or variable interest rate. In these ways, your new loan saves you some money. Yet, there is no guarantee of improved loan terms. Therefore, we advise you to get a quote for your application beforehand. Some private lenders allow you to get a customized rate if you input your debt details. As a result, you can assess if the new rate will be beneficial for you or not. 

Also, keep in mind that there can be some fees associated with this program. Try to find the one with no hidden costs as you might lose a lot of money while applying. 

Consolidation vs. Refinancing

Some people confuse the consolidation process with refinancing. Therefore, we felt the urge to explain to you the difference between these two terms. 

  1. Providers- Consolidation is a process established and provided by the U.S Department of Education. Meanwhile, private lenders offer Student Loan Refinance.
  2. Loan types- Only federal loans qualify for Consolidation programs. However, Refinancing can be suitable both for private and federal loans. 
  3. Fees- While Consolidation does not require any fee, Refinancing can be costly. Yet, you can find a private lender who refinances without any hidden fees. 
  4. Lower Interest Rate- Usually, Refinancing is more effective in reducing the interest rate because it is based on your credit history. However, Consolidation generates a new interest rate through the weighted average method, which mostly does not offer a lower rate. Even if it does, it is because of a more extended repayment period. Therefore, you will pay even more in the long run. 
  5. Availability of other Relief Programs- If you refinance your federal loan, you will lose all the privileges a federal loan brings, such as forgiveness or Income-Driven Repayment opportunities. However, they will still be available if you consolidate your loans. 

Bankruptcy Discharge

Another Private Student Loan Relief method is through declaring bankruptcy and demanding the elimination of your debt. You need to prove in court that because of your loan repayments, you cannot afford the necessities for living. While it sounds simple, this program has both benefits and drawbacks. 

In terms of advantages, this discharge opportunity gives you a chance to get rid of every penny of your debt. It is one of the few programs for private student loan debt relief with complete elimination. Besides, this Private Student Loan Debt Relief opportunity is relatively cheap to proceed. While you should pay for some fees in the Refinancing plan, a bankruptcy discharge does not require any payment. Lastly, during recent years, there have been several cases where the court decided to cancel the debt due to bankruptcy. These cases increase the probability of future benefits for bankruptcy discharge. 

Yet, you have a tiny probability of getting rid of your debt with this opportunity. It is true that several people could make it through in recent years. However, the receivers of discharge are only a small fraction of people who tried this route. Besides, you also need to pay for an attorney and other administrative costs for raising your case in the court. Also, the requirement of discharge is very extreme. Even if you make less income, it is incredibly difficult to prove that you cannot buy necessities such as food because of debt repayment. For these reasons, this program is not the best option to try. It is only worth trying if you do not meet the requirements of any other Private Student Loan Relief programs.

Program Details

As mentioned before, you have to prove that you face financial challenges because of your student loan. More professionally, you should prove your “undue hardship.” It happens when you cannot even afford necessities for living. If you apply to the court for reviewing your case, they are likely to check several elements. These things can include your type of school as well as your current financials. 

There are some advantages to certain types of loans, which improve the probability of getting the discharge. For instance, if you studied in a school that is an ineligible institution for the Department of Education, you have more chances that the court will rule positively. Besides, as we discussed earlier, the Navient lender is facing allegations for mismanagement. Therefore, if you got loans from them, then your loan can qualify for this Private Student Loan Debt Relief opportunity. Also, loans from reliable, national lenders have a higher probability of elimination. 

To sum up, it is tough to avoid your debt by claiming that you are bankrupt because of private student loans. If you do not have any other solution and can afford an attorney, you can try this opportunity. Besides, you also have a small chance of getting some reduction in your debt if you do not qualify for full discharge.

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

Default

Please, pay incredible attention to this section. While we do not recommend anyone to default on their loans, it is an option that we should also discuss. Technically, defaulting is another way of Private Student Loan Relief because you will not make any other payment for your debt. However, it can have a severe impact on you. Sure, you will hurt your credit score, which will affect any future action where credit checking is necessary. Whether you need to get a mortgage, or rent a house, your credit history matters. Other than that, your lender can sue you. When you borrow money, you make a contract with the lender. Thus, you must act as indicated in the contract and make timely payments. If you fail, the lender has the right to sue you, which can result in selling your property or seizing your wage. For these reasons, the default is not advisable. 

You should also be careful because default conditions for private loans are different from federal ones. If you received a federal loan and missed one payment, they give you a nine-month period to fulfill your obligation. However, if you do not make one payment on time for a private loan, there is no delinquency period for you. As soon as the lender notices that you did not make a payment, they can take any action on your default. Also, the reason for the default will not matter. It is also possible that you missed the payment because you did not check mails, or it got lost on the way. 

Consider Alternative Solutions

For all these causes, Private Student Loan Debt Relief method is the last resort option. Unless you consider all the risks, do not go for this method to get rid of your debt. As soon as you realize that you will not be able to make your payment, contact your lender. If you can explain and convince them that you are going to default, they might consider helping you. By helping, we mean modifications or partial forgiveness. Most lenders do not wish their loans to default. Therefore, they can be forgiving. 

Final Words

To be honest, the situation is worse for private loan borrowers if they need financial assistance for their debts. There are currently plenty of forgiveness or discharge opportunities for federal loan holders. However, those programs mostly do not apply to private loans. Only a few opportunities exist for Private Student Loan Relief, which also has a low chance of succeeding. These programs include modifications, discharge solutions, Student Loan Refinance, or default. Please, again, keep in mind that default is not advisable at all, as its consequences can be devastating. Therefore, we recommend you to contact your private lender as a first step to ask for modifications. Sometimes, to avoid the default, they can ease the debt terms for borrowers. Also, if you need further clarification or an expert to advise you, contact Forget Student Debt. We will help you to choose the best solution and take advantage of a debt-free future.