These include deferment, forbearance, cancellation, and affordable repayment rights.Federal Consolidation Loans for Borrowers in Default As of July 1, 2010, the Direct Loan consolidation program is the only government consolidation loan program.This belief might explain why only 0.1% of debtors attempted to have their student loans forgiven, or “discharged,” through bankruptcy in 2007, according to a study on bankruptcy filings.
Student loan refinancing is a way to save money by swapping your current student loans for a new, lower-interest-rate loan. Once I refinance, can I postpone payments if I go back to school or lose my job? [Back to top] It’s a good idea if you have private student loans or you have federal student loans and don’t plan on taking advantage of a federal forgiveness program or income-driven repayment plan.
It’s a simple concept, but there are lots of details to dig into. Otherwise, click on the questions below to jump to the answer. You also need strong credit and a steady income to qualify for refinancing.
Government backed loans are especially flexible when it comes to repaying your student loans.
Government backed student loans are now offering loan forgiveness after 25 years of repaying the loan and you repayment amount is based on how much money you earn.
Consolidation to get out of default works well for many borrowers with defaulted loans.
After obtaining a consolidation loan, you get a fresh start, becoming eligible for new loans, grants, and even deferments.
That’ll both help ease your burden and increase your chances of finding student loan relief through bankruptcy.
If you decide to go ahead, you’ll most likely file for one of the two main types of personal bankruptcy protection: Chapter 7 (liquidation) or Chapter 13 (reorganization).
We tackle the most common refinance questions here. What’s the difference between refinancing and consolidation? The biggest benefit of student loan refinancing is receiving a lower interest rate than your previous loans carried, which will save you money over time.
Find out if you need to consolidate your loans before signing up for income-driven repayment or Public Service Loan Forgiveness at studentloans.gov/repay. When you refinance multiple loans into a single new loan owned by a private lender, by definition you are consolidating them into one loan, which is why you may see these two terms used interchangeably.
Lenders look for good credit and steady income, in addition to financial and education requirements specific to the lender.