The Ultimate Guide to Private Student Loans Relief in 2020

private student loans

Private student loans at one time seemed to be the only way out for students struggling with their educational payments. Just as medicine cures one illness and brings many side effects, your private student loans might have brought more problems for you in the long run. But, this does not mean that you should be drowning in sorrow with the confusion of how to repay your debts.

Just as last year, 2020 may be one of the best years to get help with your private student loan debt. The reason for this is that the Consumer Financial Protection Bureau for the Federal Government is continuing to wage war against big names in Private student loans like Navient, which is one of the biggest student loan servicers in the country. So much so that it led to the Navient student loan forgiveness and many other programs designed to help graduates and postgraduates battle their loans. Such scandals with notable names in the student loan industry have led the Federal Government to aid students in debts that are both private and public.  

You might hear about for-profit schools and colleges like ITT Tech, DeVry, and Corinthian Colleges. These educational institutions and their victims are spread all around the country. Considering the number of students who have fallen victim, the Government is beginning to force them to either cover the outstanding loans of students, or in some cases, even pay them! This means that there is now a bigger chance you will get private student loan relief, although you might not get all of your loans covered, there is a chance you will receive some kind of a benefit. 

Private vs. Public Student loan debt

Before pursuing student loan forgiveness programs that fit your needs, you need to understand what type of loan you have taken. Previously, the Government has had trouble establishing a universal relief program to help students struggling with debt. The reason for this was the fact that the loan lenders varied greatly from state to state, and institution to institution. Pinpointing every lender and preparing a program for each of them would simply not be efficient and possible. 

Also, private lenders tend to provide loans differently from their counterparts. Things like debt to income ratios, payment schedules, maximum loan amounts, interest rates all tend to vary from one lending institution to another. There are, however, some regulations put in place throughout the industry, regardless of the laws, the rules remain very flexible. 

You should not have your hopes down, because even though the aspects of private lending mentioned above are correct, the industry is seeing a rise in momentum building initiatives. There are new legal precedents, and other regulations being put in place to help borrowers with their private student loans. You could even expect to see radical changes soon. If you have private student loan debts, and do not know how to deal with it and make it more affordable, you have more than a few options to handle the situation. You can read more about them down below. 

Relief programs aimed at Private student loans

As mentioned before, you have quite a few options when looking for a useful debt relief solution. You should, however, keep in mind that not every opportunity may be available to you. This means that you will either need to have a call with one of the debt consolidation programs or debt relief companies or do a little research on your own. By doing so, you will have a considerable area to focus on to pinpoint the exact method that may work for you. 

If you finally pinpoint what you are looking for and choose a service provider that deals with paperwork and research, most experts advise that you also give hotlines a call. These hotlines are one of the best places to get expert guidance on relieving student debt. They can give you an analysis of your debt, and help you find ways of reducing them. In some cases, you can get help on restructuring your loans via refinancing, consolidation, or any other opportunity that may seem fit. 

It is no secret that if you choose an agency after speaking to them via a hotline, there will be a fee associated with the research, restructuring, and preparation of your debt. If you are not ready to pay for such a service, you should know that talking to them is free. This means that you can take the opportunity to speak to them over the phone and have your questions answered without having to pay a fee. If you are smart enough, you can squeeze some essential details in, and set up a track for yourself to work on. Hence, this will be one of the most worthy five minutes you have spent on a call. 

Relief programs to look for

private student loans

In short, there is a list of loan relief programs you can look into to get guidance. 

  • Refinancing Programs
  • Forgiveness Programs
  • Consolidation Program
  • Bankruptcy Declaration (This is not a program, but an option)
  • Defaulting on the existing Loans (Also not a real program, but an option you have)

Down below, you will find more in-depth information about what each program and option can do for you. You might find an option that will save you tens of thousands of dollars in debt relief. 

Loan Refinancing 

Loan refinancing can bring more than one benefit to the table for any student struggling with private student loans. For starters, they are very effective in dealing with the debt you have at hand. Another good news is that anyone with a private student loan can benefit from refinancing options, regardless of the situation. You could be suffering from terrible interest rates, loan terms that are too short for you to pay off, or even other financial issues that keep you from making payment on time. Regardless of the situation, a loan refinancing program should help you ease your private student loans

The process of loan refinancing is a simple one, but it is also a process that requires the borrower to get the approval of a lender to restructure the monthly payments. By law, they are mostly not needed, which means that they don’t necessarily have to do it, but can be talked into. 

Although, for this reason, it may be challenging to get approval for refinancing, it doesn’t mean that you are hopeless in the process. If you can prove that you face very unfavorable odds in making payments, defaulting your loans, or even have a chance of missing payments in general, it should persuade the lender to come into an agreement. 

Even with that, loan refinancing comes with its downside, and you should be prepared for the worst. Because as mentioned above, if a loan lender does not want to refinance the loan, they have lent to you, they do not have to. Put simply, if they do not care much about your problems in making your payments, it may have to be the end of the line for you, and in refinancing terms, there isn’t much you could do. 

Benefits of Refinancing

But, if you can come to terms with your lender, you could be in store to save good money towards your private student loan payments. Here are some positive outcomes to refinancing your loans:

  • You can have reduced interest rates, which is an excellent opportunity for you to save money.
  • Complete loan forgiveness is another benefit you may receive through refinancing, because in some cases, lenders may agree to write off your debt as a whole. 
  • The last but not least benefit of refinancing may be the option to prolong your repayment schedule. This may not be the best option to save money at least in the long run, but extending the time it takes for you to pay off the private student loans you have. It’s important to note that you will be paying more money in interest rates over time, but you will be significantly reducing the monthly payments you make towards your loan. 

If you are eager to discover your eligibility for the refinancing programs, you will need to contact the lender who has issued your private student loans, or one of the refinancing institutions available to you. You should let both parties know that you are looking for ways to avoid going into the default system. During your conversation, it’s also good to note that you should let them know that you will be left with no option but to stop making your payments if you cannot get their help. You can even go on to say that you will default on the loans, or also declare bankruptcy if they do not help agree with refinancing. 

Worthy note

One last point to mention would be to contact a lawyer before you talk with your lender. Anything you may say or do could be used against you in the future. You would not want to poke an eye while trying to fix an eyebrow. These major lenders often have the best lawyers at their service, meaning that they have the power to pull out an Uno reverse card on you at the last minute. It won’t be useful if you have to end up looking for private student loans for bad credit as a result of not paying your monthly payments and having trouble with your current lender. 

Forgiveness Programs

You should not have high hopes for getting a shot at forgiveness when it comes to your private student loans. The reason for this is that there are no official ways of getting forgiveness for the private student debt that you have.  

Loan forgiveness programs, in general, are great opportunities for students with debt, because they give the student a chance to completely wipe away their loans. That’s right, not restructure, reduce, or even consolidate them, but have them wiped off once and for all. The only bad news is that forgiveness programs are only available to those with federal student loans. Federal loans for students tend to qualify for many forgiveness programs compared to the private ones, which do not apply for any forgiveness program. 

But do not fret yet, because lucky for you, forgiveness programs for private loans are not the only options you have for debt relief. There are plenty of other opportunities for you to benefit from. 

Consolidation Programs for debt relief

If you were feeling down due to the lack of any forgiveness programs for you to take advantage of and wipe off your student debt, you would be pleased to hear about consolidation programs. Let’s say you want to benefit from the DeVry lawsuit or get back at any private lender who has tricked you into a massive debt load, and you can easily count on consolidation programs to ease the burden. 

Nowadays, companies that specialize in consolidation programs can offer more than a mere help with student loan debt. These organizations can help you with making monthly payments on time and other financial feats you never thought you could tackle. 

Benefits of a Consolidation program

debt settlement

As you might have learned, many benefits come with applying for a consolidation program. Many of which are:

  • A chance to combine multiple loans from different private lenders into one loan from one lender. You will be taking a single large loan to pay off all other loans. This means one account to track, one interest rate to consider, and, best of all, a single monthly payment. 
  • You can also reduce your monthly payments as a whole, and get longer repayment terms that come with better interest rates. In general, through consolidation, you can restructure your loans as a whole. 

Just as with anything, consolidation programs do come with their downsides. One of the most significant disadvantages is that a private student loan cannot be consolidated alongside federal student loans. This means that if you have a single private loan, you do not have a chance to qualify for any consolidation program. 

This should, however, not be a great deal-breaker for you. Because if you do have federal loans, you have taken as a student, there are many government loan forgiveness programs for you to choose from. With a little research, you could find the best option for your case. 

Bankruptcy declaration towards private student loans

You need to consider some crucial things before you can declare bankruptcy with the hopes of getting a bankruptcy discharge on your private loans. For starters, you need to make sure that you have tried every other option that you have before going bankrupt. 

Also, the process of declaring bankruptcy is a very complicated and time-consuming one, which can end up costing you more money in the end. The worst part is, it can destroy your credit scores for up to seven years. This makes it impossible for you to get an affordable loan in the future, so you can say goodbye to getting private student loans for bad credit. Also, you will find it very hard to get an affordable loan in the future in regards to mortgage, business loans, and even car loans. This makes the bankruptcy discharge an absolute last resort for those drowning in private student loans.

You should also speak with an experienced lawyer who specializes in bankruptcy before considering taking any action. 

Defaulting student loans

Defaulting student loans, just like declaring bankruptcy, is something you should not do. But, it does stand as a last resort option in case there is a need to do so. 

Just as with any other loan, you could also default the private student loan that you have. Before doing so, you should be fully aware of the consequences that may come with choosing this option. For starters, defaulting any loan will lead you to the destruction of any credit score that you may have. You could even be looking at far worse results than a bankruptcy declaration. 

Also, if you decide to default the loans you have, it gives your lender a chance to file a cause of action lawsuit against you, which in other terms means a breach of the contract. You should know that the contract you signed with your lender forces you to pay your loans back. Getting student loan default help before taking such a significant step can save you from a lifetime of regret. Nevertheless, if you have no other options, and simply cannot continue to make your payments and live your life, this may be your only choice. 

Which option should you choose?

This is solely up to you, because everyone has their problems when it comes to private student loans. You should take any opportunity to do thorough research before settling on an option. Making phone calls to hotlines, and reading such articles like this online can help you set up the decisive course of action, you need to get out of your student loans once and for all!