If you are confused about defaulted student loans, and you don’t know what to do, it is ideal to understand the best ways to get out of default. A loan consolidation can offer you great solutions to this problem. Loan rehabilitation is also available to help you in clearing your defaulted student loans.

What’s Student Loan Consolidation?

Graduate students, undergraduate students and the parents of students can look to credit unions, lenders and the federal government for assistance if they want to simplify their debt. A wealth of student loan consolidation professionals are available to direct students through the act of putting all of their student loans together into one lump sum with a reduced interest rate. This will help students to significantly reduce the number of bills they have to pay every month. It is also a perfect way to manage finances and start the process of getting their monthly payments under control.

Federal student loan consolidation allows all active student loans to be gathered into one manageable monthly payment. If a student meets the requirements and qualifies for federal student loans, then he or she also qualifies for federal student loan consolidation. This includes Perkins loans, Stafford loans, direct loans, plus loans, SLS, guaranteed student loans and health professional student loans. Whether the beneficiary of a loan is the student or his or her parents, they can look into student loan consolidation, and all loans must be consolidated separately.

What’s Student Loan Rehabilitation?

Some lenders will allow you to rehabilitate your loan. If you appeal to the lender and demonstrate a concerted effort in making amendments to your default, you may qualify for the loan rehabilitation program. Requirements for rehabilitation differ based on the loan - the Perkins Loan Program requires 9 on-time monthly payments, and the Federal Direct Loan Program requires 9 full payments within 20 days of monthly due dates over a 10-month period.

You can repay loans with automatic withdrawals from your bank account or through your credit card. After the completion of your payments, your loan will be considered rehabilitated, and the default status will be removed from your account. When you enter into the program, the guarantee agency that holds your loan must seek a lender to purchase the account after your loan is rehabilitated. This is who the account will be reassigned to when the rehabilitation process is complete. Advantages of loan rehabilitation include renewed eligibility for federal loan programs, removal of default status with credit bureaus, no more garnishments or IRS tax withholding.

How to Recover From Student Loan Default

If you have defaulted student loans know that you are not alone. There are thousands of Americans who struggle to repay their defaulted loans, and there are different options for you to choose from. By selecting an option that best suits your needs; you will quickly be on the road to pay it off.

Loan rehabilitation is an option to consider when you’re dealing with the hardship of this type of loans. To enroll in a rehabilitation program, you need to get in contact with your guarantor. After you sign up, it is essential that you make at least nine on-time monthly payments to your lender. After signing and returning your rehabilitation agreement, you will get a notification saying that your loan is being rehabilitated.

Your loan will then be transferred to a new lender and it will be rehabilitated; this is when your student loan will be considered out of default status. Monthly payments will be made to your new provider, and you’ll be charged up to eighteen and a half percent interests on the loan.

The loan consolidation is as well another option to pay off defaulted student loans. Before you’re accepted into a loan consolidation program, it is vital that you have an acceptable repayment arrangement. This is when you make three consecutive payments with your current lender. The direct loan program is the best consolidation program run by the US Department of Education.

The major difference between rehabilitating your loan and consolidating your loan is that, with rehabilitation, the default status is removed whereas with consolidation the default status is not taken off of your credit report. With the use of the loan forgiveness programs, you will get yourself on the road to paying off your student loans thus relieving you from the problem of having large payments every month.

In planning for the successful repayment of your student loan, you must have your student loan paperwork and correspondences done. A reputable document preparation company can help you organize your loan paperwork this will make the procedure easy and stress-free for you. We can help you connect with a nationally recognized document preparation company to help you prepare and arrange your document at a fair price.

Interested in Refinancing Student Loans?

Here are the top 5 lenders to refinance Student Loans in 2018!
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Variable Rate
2.58% - 7.07%

Fixed Rates
3.25% - 7.25%

Terms
5, 7, 10, 15, 20 years

Eligible Loan Balances
Minimum: $5,000
Maximum: None

Visit SoFi
Logo

Variable Rates
2.69% - 6.01%

Fixed Rates
3.09% - 6.69%

Terms
5, 7, 10, 15, 20 years

Eligible Loan Balances
Minimum: $15,000
Maximum: No Max

Visit Elfi
Logo

Variable Rates
3.92% - 11.52%

Fixed Rates
6.07% - 12.66%

Terms
8, 10, 12, 15 years

Eligible Loan Balances
Minimum: $2,000
Maximum: Cost of Attendance

Visit College Ave
Common Bond

Variable Rates
2.55% - 7.10%

Fixed Rates
3.14% - 7.25%

Terms
5, 7, 10, 15, 20 years

Eligible Loan Balances
Minimum: $5,000
Maximum: $500,000

Visit CommonBond
LendKey

Variable Rates
2.56% - 7.94%

Fixed Rates
3.15% - 8.12%

Terms
5, 7, 10, 15, 20 years

Eligible Loan Balances
Minimum: $7,500
Maximum: $300,000

Visit LendKey