Negotiating with education lenders for better interest rates and payment options is possible. Establishing a positive relationship, keeping communication open, and applying for a hardship deferment can help. Consolidation with government agencies is a good option.
People often find that they have to negotiate with their education lenders to get a better interest rate, defer loan payments, or deal with other issues that may arise when dealing with student loans. Most lenders are very receptive to these discussions, but there are a few things to keep in mind that can make negotiations more successful and enjoyable for all parties involved.
One thing to keep in mind is that since you can’t go bankrupt on student loans, most lenders are willing to be very patient. They are aware that they will get the money eventually and are perfectly willing to charge additional interest if payment takes longer than expected. For this reason, an education lender can afford to be much more flexible about payment options than other types of lenders. However, a creditor will not hesitate to garnish your wages or take other steps if you are unable to communicate; therefore, keep the lines of communication with your creditor open.
The most important thing you can do when dealing with an educational lender is to establish a positive relationship with that lender early on. Keep your address up to date and pay your loans on time. If for some reason you are unable to make a payment, call the creditor and discuss the situation rather than simply not sending the payment. Many creditors are willing to excuse payments periodically for hardship, sometimes not even requiring paperwork, and others are willing to take partial payments in a month when you are struggling.
In addition to establishing a positive relationship, it can help to have a specific contact at the lender’s offices. Write down the name and extension of the person you talk to so you can call and ask for that person in the future. While anyone can manage your account, it’s helpful to talk to someone who knows you and your background, as this can make trading easier.
If you need to negotiate with your education lender to temporarily reduce or suspend payments, you will need to apply for a hardship deferment. Most lenders have a hardship deferment form, usually available on their websites, but it may be helpful to call to discuss a hardship deferment so that a note is made in your account before you submit the form. Be prepared to receive questions about your level of income and expenses when calling to discuss a postponement of hardship, and if there are special circumstances, mention them on the phone to have them recorded in your account record.
You can also talk to your education lender about payment plans. When your student loans are repaid, most lenders set up a plan by default in which you pay the same amount each month. However, they often have other plans available, such as a flexible plan, where you start with small payments right after graduation and your payments increase over the life of the loan, assuming you’ll be making more money to be able to afford the benefits. additional. cost. Most education lenders also do not penalize early payment, which means that if you pay early in a good month, the total due in the next month or months will be reduced accordingly.
If you are not satisfied with your interest rate, you can negotiate a better rate simply by calling and asking. Some lenders offer lower interest rates to customers who consolidate their loans, which is an option to consider if you are unhappy with your interest rate. Consolidation can also lock you into a low interest rate, which can be very helpful if you think interest rates are going to go up.
If you find that your relationship with your education lender remains poor despite your best efforts, consider consolidating your loans with another lender. Government agencies created specifically to handle student loans are usually a good option for consolidation. You should be careful with for-profit private companies as their terms of consolidation may have hidden caveats that could become problems down the road.
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