How to negotiate student loans
Negotiate Student Loan Debt
College teaches nothing about how to negotiate student loan debt. Even graduates with doctoral degrees are dunces when it comes to confronting lenders about how to whittle down college loans. Studies indicate that most students graduate from college owing more money than they can make in the first two to three years of employment. Years of borrowing for a higher education can add up to even more years of finding funding to pay for it all. And top paying careers may be just as elusive as the memory of a sophomore year sock hop! But financial strategists offer plans to help graduates negotiate student loan debt down to manageable sums. Debt negotiation, especially on larger delinquent amounts, is something most consumers should not attempt to do on their own. Money managers recommend that students consult with professional debt negotiation firms, many of them available online, to arrive at a legal settlement with lenders.
Financial planners and counselors can take the heat for college graduates and effectively negotiate student loan debt without breaking a sweat. The advantage of dealing with a third party in debt resolution is that the professionals can field creditor calls and stop students from being harassed. Counselors can also assess a graduate's ability or inability to repay loans and work out an acceptable plan with creditors to break delinquent amounts into smaller increments. Creditors, especially government lenders, such as the U.S. Department of Education, will accept a payment plan with reasonable terms to give grads a chance to get a good paying job and accumulate resources to honor financial obligations. Some lenders may be willing to take small payments initially and increase those payments as graduates gain lucrative employment.
Lenders reason that graduates have been privileged with liberal financing for four to eight years, and usually within three post graduate years it is simply time to pay up. But shrewd negotiators can demonstrate the student's financial status and negotiate student loan debt repayment with reasonable terms. Just as negotiators act as mediators between graduates and creditors, so is Jesus Christ a mediator between man and God. "For this is good and acceptable in the sight of God our Saviour; Who will have all men to be saved, and to come to the knowledge of the truth. For there is one God, and one mediator between God and men, the man Christ Jesus; Who gave Himself a ransom for all to be testified in due time" (I Timothy 2:3-6).
Legal arbitrators hired to negotiate student loan debt may also recommend a strategy for students to gain control of indebtedness by clearing up other smaller accounts. College students are notorious for credit card abuse. Some graduates may own as many as a half dozen charge accounts for everything from clothing and books to food and fuel. But life after college cannot be managed with a credit card. Negotiators may advise graduates to pay off high-interest credit card debt in order to free funds for repaying lower-interest student loans. Charge card interest is treacherous and can compound the original purchase cost by 15% to 24% annually. A pair of $30 jeans could easily wind up costing over $100 when interest rates and late charges are added in. And while paying with plastic and making minimum monthly payments is the norm for students, the cost of mismanaging a charge account can be debilitating.
Once graduates pay off outstanding charge accounts, financial counselors can negotiate student loan debt to mediate a settlement or manageable monthly payments with lenders. A wise recommendation is to take the money that was used to pay off charge cards and begin applying those same amounts to student loans. Consistent, timely payments can help build a reputation for creditworthiness with lenders and establish a rapport with bankers and financial institution officers which can come in handy for future financing opportunities. Students who still have trouble managing charge accounts may be able to utilize financial counselors to help work out a reduced interest rate with card issuers.
Graduates may be tempted to forego hiring professionals to negotiate student loan debt; but the obligation just won't go away. The longer grads fail to address the issue of indebtedness in pursuit of education, the longer and more expensive the loans will become. Undergraduates should consider attempting to address loan repayment before graduation; and if not before walking across the stage, certainly before considering marrying, owning a home, or starting a family. An unpaid college loan is like an albatross hung around the neck, sometimes taking an occasional bite until it gets the grad's attention. The best recourse is to engage professional counselors to help fight the battle of indebtedness; or make provisions to repay loans before they can get out of hand and grow by mammoth proportions. The process may be slightly painful at first, but the rewards of beginning repayment efforts are well worth the initial agony.
Newly employed college graduates may consider taking out an allotment from weekly paychecks to help repay student loans. Financial counselors may suggest automatic bank drafts to creditors to negotiate student loan debt. Most lenders will jump at the opportunity of consenting to employee allotments or automatic drafts and may reduce interest rates if they are assured of repayment. Professional money managers can also provide college graduates with a firsthand education on personal financial management. Counselors may suggest developing a budget which includes regular living expenses, such as rent and utilities, food, vehicles, insurance, and of course, student loan payments. It is surprising how many people, even college graduates, don't know about maintaining and balancing a personal budget, but it's never too late to learn. Once students understand the basic principles of money management, they can graduate to higher levels of financial responsibility, including paying off student loans.
How To Negotiate Credit Card Debt
Knowing how to
negotiate credit card debt could be the first step in resolving financial woes. Most debtors have no idea how to approach creditors and fear the repercussions of falling behind on payments. But creditors are usually willing to work with borrowers once they are aware of financial difficulties. In today's uncertain economy, individuals from all sectors of society are experiencing tremendous financial obstacles. From plant closures, bank buyouts, and housing market slumps to stock market fluctuations and a devalued dollar; the American economy has experienced perilous times which have a direct impact on the consumer's pocketbook. Banks are tightening up on lending as interest rates continue to climb; and consumers and business owners alike are caught in the melee from Wall Street to Anytown, U.S.A. When world systems fail, men must place their confidence firmly in God. "The Lord knoweth the days of the upright: and their inheritance shall be for ever. They shall not be ashamed in the evil time: and in the days of famine they shall be satisfied" (Psalm 37:19).
Creditors are discovering what it is like to try to operate a business when the banks file bankruptcy; and many are settling with borrowers who know how to negotiate credit card debt. Debtors need to remember that creditors, even charge account issuers, are people, too. They read the newspaper, watch television, and surf the Internet; and are well aware of the economic plight of thousands of Americans. What creditors don't know is how an individual cardholder proposes to repay delinquent accounts. Debtors should contact creditors to apprise them of their personal financial situation, which may sway lenders to accept a reasonable repayment or reduction plan. Chronic illness, job loss, or indebtedness due to divorce could all cause debtors to fall behind on payments. Account issuers are more sympathetic with debtors who have a legitimate reason for failing to repay, rather than those who blatantly abuse the privilege of buying on time. Some account issuers may settle for half of the unpaid balance to avoid losing all monies in the event borrowers choose to file bankruptcy. Delinquent charge account balances are considered unsecured and as such, would take a back seat to secured creditor claims. Borrowers can contract with online or local companies that know how to negotiate credit card debt to satisfy creditors and maintain good consumer creditworthiness.
Arbitrators make a strong case on behalf of debtors to persuade account issuers to reduce delinquent balances, especially for those who owe more than $10,000. Professional mediators who know how to negotiate credit card debt will consult with debtors to review past due accounts and assess income earnings. With a better understanding of the debtor's financial standing, negotiators can approach account issuers with a feasible repayment plan. Settlements may include waiving late fees or reducing annual percentage rates. Options may also include refinancing past due balances at a lower interest rate or settling for as much as 50 cents on the dollar. Debtors who opt to work with professional negotiators should do a background check to make sure that companies are reputable and have a good track record which demonstrates more than just a basic knowledge of how to negotiate credit card debt.
Card holders should be careful about dealing with fly-by-night businesses that promise to wipe out charge account balances for a fee. Most creditors want their money and are not willing to forgive and forget hundreds or thousands of dollars. Debtors should also be careful about divulging personal and confidential information over the phone or online. The Better Business Bureau is a good resource for checking out arbitrators who claim to know how to negotiate credit card debt. Legal negotiators should also be accredited and certified. Borrowers should not confuse negotiation with consolidation. Consolidating charge account debt simply means that all outstanding balances are compounded; and lenders agree to loan debtors enough money to pay off accounts in exchange for one monthly note. Debt consolidation is usually secured using long-term collateral, such as the debtor's house. Because charge accounts require no collateral, negotiations would more than likely not include putting up the homestead as a loan guarantee.
Negotiations between debtor and creditors may take some time before arriving at an amiable resolution. Creditors may require debtors to make a lump sum payment, followed by smaller monthly payments as a good faith gesture. After all, account issuers have a lot at stake when debtors amass large sums of charge account debt without paying. Each time a purchase is made, the card issuer is extending the borrower a loan for the purchase plus interest until the balance is paid. Revolving charge account issuers make money from interest charged on the unpaid balance; but if payment is never received, the losses can be substantial. The card holder retains possession of charged merchandise; but the account issuer has already submitted payment to the merchant and may never recoup monies when debtors default. It is no wonder why banks, merchants, and lending institutions insist on good to excellent credit ratings before issuing charge accounts. A debt arbitrator may know how to negotiate credit card debt, but if the debtor has a reputation for charge account abuse, the case may be difficult to win.
Debtors who do not know how to negotiate credit card debt and cannot afford to hire professionals can try surfing the web for financial content sites which give tips on how to handle revolving charge account indebtedness. Self-help books also abound at the local library or bookstore. Consumers can begin by calling creditors, sharing personal concerns, and proposing a feasible plan over the telephone. Card issuers will usually accept a workable plan, but debtors should be sure to honor promises to repay and comply with creditor requirements. Debtors who faithfully make regular payments to try to clear up past due accounts may be able to reestablish creditworthiness and regain creditor confidence.Source: www.christianet.com