@Anonymous wrote:
Hi there:
I hope all of you are staying safe.
I'm a long time reader here, since Jan anyway. I've learned so much. Thank you to everyone that gives great advice on all the forums.
This is my first post for help and understanding though.
I currently have a balance of $43,321 in student loans, all in default for many, many years. I attended school in 1994 and loans went into default in 1996.
The loans include:
1 Consolidation Loan - $38,813 - Servicer is ECMC
8 Subsidized Loans - $2,861 - Servicer Dept of ED
3 Unsubsidized Loans - $1,647 - Servicer Dept of ED
ECMC had a garnishment on my wages and I have paid a very large amount (with all the interest) so far but that went away in March with the CARES Act.
I have to say, I like having 15% more cash every payday but I know if I don't do something, I'll lose that money come October 1st when the garnishment will start again.
Could I ask for suggestions on what to say when I contact ECMC about a rehab loan?
I want the very best option in interest and terms but I just don't know where to begin.
Any and all recommendations would be appreciated.
Side Note: All the Student loans came off all 3 CR's when the garnishments started which was/is great. Will they go back on with a rehab loan?
I just sst up rehab with ECMC a couple months ago.
*so easy!!*
You dont even have to call, just go to their website and you can set it up right on there!
It was super easy, way easier than when I was trying to arrange it with them over the phone over the course of a couple months!
I will say you definitely have me beat! I have 11 SLs (including 1 consolidation loans), going back to 2001.
Take care of them!
Not setting up rehab is much more painful and expensive!
You are paying ENORMOUS collection costs and fees! When you finish (if they are FFEL loan, which I am assuming they are) the collections costs will likely be cut down to 16%. I know mine is currently at something like 25%, so I cannot *wait* for that extra chunk to fall off after rehab is completed! The total collection costs (likely in a %) will be spelled out in the rehab agreement when you set it up and is always accessible online from your ECMC account under "documents".
Any payment made to ECMC when not in rehab likely just goes straigh to collection costs. I can almost guarantee you have seen little to no movement in the original loan amount at all. This makes all that money garnished even harder to lose!
I strongly suggest going online right now and setting it up before the garnishments start again in sept/oct!
Lastly, there is no "rehab loan". It will not go back onto your credit until you finish rehab and they find a new servicer to take your loans. Then they will be back dated to the original loan date with *only* positive reported history! Talk about a win! This will likely increase your AAoA, depending on your credit profile and increase your positive credit history. They will also now factor into your DTI, as they will once again be actuve loans.
When the loans are with a new servicer, the interest rate will remain the same as when you got the loans if it was a fixed rate. Variable rates depend on the currently SL interest rates. so you don't really get an option in that arena. Just make sure to stay on top of following your loans and tracking down the new servicer so you can get into an IBR plan or whatever type of repayment plan you are after straight away because it automatically defaults to a standard repayment plan. You will have to find out about that info from the servicer at that time.
Me and my SO also waited long enough to do rehabs until they were set to start falling off our CRs. We are both currently set up in 5 different rehabs with 4 different servicers and they have not put anything on our credit while we have successfully have had several fall off. I am glad it worked that way, but sux how much wasted time and money was spent learning our lesson. At least our credit will be greatly improved with those negative accounts permanently gone and only positive ones in their place once the rehabs are completed!
Good luck!
