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Debt Negotiation: Cut Your School Loans in Half or More

School loan debt can seem like a shock when you first graduate from school and find yourself not only starting a life and looking for a job but also faced with immediate and sometimes multiple payments toward all the money you borrowed during your academic career. If you drop out of school for any reason, you are also faced with the same dilemma, which can feel unjust and complicate whatever you are already going through. There are ways to deal with student loan debt that can be easy on your credit and help you get on your feet and start your financial life solid and successfully.

Debt negotiation is a form of debt management that allows you to work with your creditors and find an acceptable payoff amount that can reflect good credit practices and satisfy the debt simultaneously. Debt negotiation services are offered through many financial businesses and institutions. Still, with a bit of help, you can learn to negotiate with creditors on your own and find success. Follow a few simple rules to negotiate away from your student loan debt and find relief from financial pressure.

1- Understand what debt negotiation is

It’s important to know exactly what debt negotiation is to be successful when negotiating your school loans. Debt negotiation is a way to talk with creditors and offer a settlement amount for less than the current balance to pay off the debt in full. This is a controversial form of practice on the creditor's end as they lose out on all the interest you would have paid over the life of the loan, but they are guaranteed the money when in the future you could default.

2- Take a look at your current loans

Make a list of all your current student loan debt with the following information for each: current balance, current monthly payment, interest rate, creditor, and creditor’s contact information. The contact information is the most important thing to know because you want to make sure you can speak with an actual person and not a call center employee or other individuals who are not authorized to talk to you. Also, the balance is your bargaining chip, so it’s important to know what that balance is.

3- Talk to the right person

The key to successful debt negotiation is to make sure you speak with someone authorized to negotiate with you about your account and can take a settlement offer. If you are talking with someone other than a supervisor or account manager, you are wasting your time and may not get anywhere with the creditor. When a live person first intercepts you, ask for a supervisor until you get someone who says they are authorized to negotiate a settlement offer with you.

4- Keep your options open

When negotiating with student loan creditors, you may hit a wall of resistance and find that they are not open to a settlement offer or lower the amount of the loan at all. Do not be discouraged entirely and give up, instead refocus your attention and ask them to reduce the interest rate, at least then if you have to keep paying on a higher interest rate. This can shorten the length of your loan and reflect positively on your credit.

When you are looking for a way to control your school loans, don’t discount some of the more strategic methods or worry that only an expert can handle them. Debt negotiation can come from anyone and is most credible when you, the account holder, are trying to negotiate and work out a deal with the creditor. A settlement amount and payoff are the best options to consider, but often you will not have a lump sum of money to negotiate with, so the next best thing is to work on the terms of your loan to make it work better for you.


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