Reply
Regular Contributor
Posts: 185
Registered: ‎07-26-2009
0

*Private* student loan default question

Hi there,

 

so - I'm at a stand still with my SallieMae private student loans. I've come to terms with the fact that I can not pay them what they're asking for - they are by far the most unflexible lender I've ever had the displeasure of working with. This question only applies to private student loans - so please don't suggest going on the income based repayment or anything that doesn't apply to Private Loans. I know my credit score is going to tank, but will my credit cards end up closing on me because I can't pay my private student loan with sallie mae? Essentially this would be the only account in bad standing, I'm current on everything else. Trust me, it's not a matter of not wanting to pay it back - I've tried offering them what I can afford and the representative told me it's basically all or nothing - they don't want partial payments, i'll still fall further and further behind. The monthly interest alone is over 400 dollars. It's just insane - I'm seriously never going to get anywhere with it. It depresss me extremely and makes me want to just end it all becuase I'll never amount to anything. here's the situation. I'm going through some seriously expensive medical problems right now and I would much rather take care of myself then to send all of my money to Sallie Mae. I can't focus on getting a higher paying job right now until I get this medical problem figured out - I need the insurance and cannot afford even a 1 day lapse in health coverage. Anyone out there default on a private student loan and just stop answering the phone? I have heard of a few people who have done this and never got sued. I'm just afraid it's going to cause my credit cards to close, which I'm using to pay for my portion of the medical expenses. gosh, I just don't know what to do. Any advice would be greatly appreciated. Thanks..

Community Leader<br> Valued Contributor</br>
Community Leader
Valued Contributor
Posts: 1,262
Registered: ‎06-09-2008
0

Re: *Private* student loan default question

I'm sorry to hear about your situation, it sounds like you're in a tough spot.

 

Unfortunately, you may well see negative actions from your credit card lenders based on your score decreasing and negative remarks appearing on your report.  Keeping a low utilitization and staying current on all of your credit cards will probably reduce the chance of that.  It all depends on what threshhold that particular lender has for taking adverse action on someone in your situation with that card and limit.

 

It is very hard to get out from under private student loans, and if you stop paying, you run the risk of being sued and having wages garnished or other action taken to collect the debt.  At this point, if you truly have no other options, you may just have to take your chances with ignoring them and then to go court if you are sued and see if the judge is willing to give you a workable judgment and accept that you may have your wages garnished at that point in time.

 

Given the severity of your situation, it may also be a good idea to reach out to a legal aid society in your state to see if you can get some free advice on any other legal options, they may also be able to refer you to sources for Medicaid or other medical assistance.

Regular Contributor
Posts: 200
Registered: ‎09-21-2013
0

Re: *Private* student loan default question

Have you inquired about a deferrment or forbearance?

Frequent Contributor
Posts: 421
Registered: ‎03-23-2013
0

Re: *Private* student loan default question


Rikku wrote:

Have you inquired about a deferrment or forbearance?


Correct me if I am wrong but I am pretty sure there's no such thing with private loans.

Regular Contributor
Posts: 200
Registered: ‎09-21-2013
0

Re: *Private* student loan default question

I'm sure it depends on the loan, but my husband has received both deferment and forbearance on his private SLs. I have three different private loans as well, and while I have never needed to use it, deferment and forbearance are options on my private loans as well. That said, it's also possible that the rules have changed since we took out our loans 8+ years ago. (Also, at least one of my private loans has multiple repayment options).

While I'm sure all of this varies by lender and type of private loan, it's worth calling and asking about. DH deferred his private loans on two separate occurrences and it was pretty easy. That said, I remember them telling us that there is a limit on deferments - I think it was two years over the entire life of loan for his private SLs. Both companies told us pretty similar information.
Frequent Contributor
Posts: 421
Registered: ‎03-23-2013
0

Re: *Private* student loan default question


Rikku wrote:
I'm sure it depends on the loan, but my husband has received both deferment and forbearance on his private SLs. I have three different private loans as well, and while I have never needed to use it, deferment and forbearance are options on my private loans as well. That said, it's also possible that the rules have changed since we took out our loans 8+ years ago. (Also, at least one of my private loans has multiple repayment options).

While I'm sure all of this varies by lender and type of private loan, it's worth calling and asking about. DH deferred his private loans on two separate occurrences and it was pretty easy. That said, I remember them telling us that there is a limit on deferments - I think it was two years over the entire life of loan for his private SLs. Both companies told us pretty similar information.

Ok. Thanks.

New Visitor
Posts: 3
Registered: ‎10-26-2013
0

Re: *Private* student loan default question

I negotiated a settlement on Sallie Mae private loans for a client that was under 50%, but the client had some funds to settle and I had to jump through a lot of hoops. It might be an option if you can afford to do it. 

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.