subject: How to Negotiate Student Loan Debt Repayment [print this page] How to Negotiate Student Loan Debt Repayment
Most students borrow money from banks or other lenders to finance their education; however, this means that after the completion of education, these students are required to repay the loan. Usually these loans may take many years to be repaid and therefore student loans should be selected with great caution. Also, the issue of negotiating student loan debt repayment may not arise until the repayment gets difficult.
How To Negotiate Student Loan Debt Repayment
One may need to negotiate student loan debt repayment when the student is expected to start repaying, usually after 6 months of completion of degree. If the student already has a job, the repayment is not difficult, however, if not, repayment through monthly installments may become difficult.
Therefore, if you already know that repayment of the loan will be difficult, then you should call the lender as soon as possible to inform him about your financial condition. This may help you negotiate your debt repayment. Also, before negotiations, you should know that you cannot get rid of your student loans even in the case of bankruptcy. It is also important to discuss the matter with your guarantors and co-signers before defaulting on the repayment as nonpayment of student loan may shift your burden to them.
Negotiating debt repayment may mean getting suitable terms of repayment like lowered interest rate or extended term of repayment; this will reduce the monthly installments. Negotiating can also be done with the help of a negotiating agency.
Negotiating for a repayment of loan may mean that the lender may settle for $5000 instead of the $10,000 loan. Also, creditors are not required to consider loan negotiation and may not pay any heed. However, if current situation is explained and a promise of repayment is made, they may accept the deal.
Debt Consolidation
A consolidation loan allows you to merge all student loans into one loan which would lower the interest rate and the monthly installments. But, consolidation loans only allow you to have favorable repayment terms and do not reduce the money you owe.
Loan Negotiation Services
Loan negotiation agencies charge high service fees. Most firms charge 60% payment at the beginning of the deal. So if you do not have money to pay your monthly loan installment, then paying the fees for negotiation agencies will be very difficult.
Therefore, the best option is to do the negotiation yourself. However, this may require thorough research and good negotiating skills to strike a favorable deal for student loan debt repayment.
