Consolidating a defaulted student loan

04-Feb-2018 02:26 by 4 Comments

Consolidating a defaulted student loan

You can consolidate into a Direct Consolidation Loan, even if you only have one federal student loan.Consolidation can be a good option for getting out of default, as long as you’re able to commit to the repayment plans it requires.

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However, understand that during student loan rehabilitation, you may still be subject to wage garnishment. Consolidated student loans are also eligible for benefits like deferment, forbearance, and loan forgiveness once the process is complete.Generally, once you consolidate your student loans you cannot have your student loans consolidated again.For those who have federal student loans, there are only two options for those trying to find a solution: Default Student Loan Consolidation or Student Loan Rehabilitation.Both of these options has positives and negatives, but either way they both have the potential to help you get back on track and out of default.You can have your federal student loans canceled for school-related reasons, such as your school closing, or in the event of disability or death. Department of Education will accept payment in the form of checks, money orders or credit or debit cards.

Learn more » You could choose to pay the full amount of what you owe on your loan to get out of default. Learn more » On this page, we write exclusively about getting out of default on your Federal Direct and FFEL student loans.Unfortunately, in order to be eligible for Public Service Loan Forgiveness on your Federal Direct student loans, you have to be enrolled in an eligible repayment plan and consistently making on-time payments.Typically, consolidation is the best option of getting out of default quickly, as you’re able to move directly into an Income-Driven Repayment plan and can immediately start building credit towards Public Service Loan Forgiveness if you’re eligible.If you have more than one student loan in default, you have to apply for rehabilitation separately for each loan, and only one defaulted loan can be rehabilitated at one time.If you use rehabilitation for your defaulted student loans, you must make nine consecutive on time payments for nine months for the default status to be removed.Private student loans and Perkins loans operate under different rules, and for more information on getting out of default, you should reach out to your servicer or the school you attended.

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