Student loan default and credit score

Federal or private loan?

Student loans will give you a double whammy with two negative trade lines....one from the lender and one from the guarantor.

If it is a federal loan, you no longer qualify for financial aid...federal aid that is. No grants or loans. You may be looking at having your income tax seized too.

If it is a federal default, you wanna look at rehabbing...that is the only way to help your credit.

Quote:

Pattrick,

There are two trade lines because the original lendor reports this as does the guarantor. I had a similar thing, reported by Citi and Edfund (California Student Aid).

The best thing to do is find out who has the loan, it is most likely with a CA and as painful as it will be....begin a rehabilitation program with them. They will ask for your bank account info, but don't give it to them. Be prepared with a pre-paid credit card that you can put funds into for a the CA to draft a monthly payment. I did this and the CA was willing to work with me and I got a payment that was reasonable. But it was a painful process.

After nine months of payments, the loans will be sold to a bank for a new payment program. Edfund is now using Sun Trust Bank. Once that happens, one of the trade lines will drop off and you will begin getting positive reports from Sun Trust, provided you make your payments on-time.

Or you can consolidate your loans, but this would be a last resort, as both negative trade lines will stay and your loans will show as a paid collection.

Hope this helps....Don't dally about and bury your head in the sand!!

The sooner you get this moving forward the better it feels.

Good Luck

Also forgot to add this.

Be prepared with a written detail of your monthly expenses. The CA will ask for this information in determining your payment. Categorize the items for you information as they will only go through categories and ask the amount that you pay every month. This would be items such as: Mortgage/Rent, Utilities, Phone, Child Support, etc.

A good accounting of your current finances will help in getting a reasonable payment.

Correct...a good accounting will help you to get reasonable and affordable payments. However, your bills have to be reasonable too....housing, reasonable car payment and insurance, child care, food, utilities (power, water, trash, phone/cell, reasonable cable plan and internet), medical, and other bills you pay. They CA may or may not care less about what you are paying VISA/Mastercard. I remember a woman who could justify paying Victoria Secret twice as much as her student loan....it just didnt cut it.

How do I find out if I have defaulted on my student loans?

Start here. You will need your PIN to access the site. If you forgot or lost it, just follow the links to get a duplicate PIN sent to your e-mail.

http://www.nslds.ed.gov/nslds_SA/

Have you talked to your lender? The above site only works for federal loans.