Student loan settlement

Notice of loan default

Is Strategic Private Student Loan Default For Debt Settlement A Good Strategy?

Out of all the questions I get from borrowers, “Is pursuing strategic default for private student loan debt settlement a good strategy?” is one of the most common. A strategic default is when a borrower intentionally stops making payments in order for the account to default. No counselor or company should ever tell someone to default. It should be a decision the borrower makes on their own after considering the pros and cons, and weighing the outcome against their current situation. When private loans barely go down after paying huge monthly payments over several years, or in the worst cases when the balance does not go down at all or even increases; strategic default starts to enter the thinking of even those borrowers who have never missed a payment on anything in their lives. Ideally, only borrowers who will inevitably be late on payments should go this route; but the lack of payment options and high interest rates have made strategic default something that private borrowers are considering regardless of their ability to pay their next monthly payment.

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Form 1098E By: Andrew Weber C.S.L.C, C.C.C.

Deducting Interest If You Settled A Private Loan

As more and more borrowers realize that private student loan settlement is the closest existing thing to private student loan forgiveness, settlement is being utilized more often as a way to pay off defaulted loans. Settlement is not easy. It is most often an adversarial process, and lenders would much rather get you back on a payment plan so they can make money off of the interest you pay over the life of the loan. However, settlement is possible through extensive negotiations. We’ve mentioned before that it often makes sense to hire a professional negotiator and/or certified professional who has extensive experience negotiating private student loan debt. There are caveats to settlement, and pros and cons to be weighed.

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