This is where student loans kill you and your financial profile.
Rehab the loans, see if they can do an income based repayment plan during the rehab, worst case after. Some may even allow an interest only based repayment plan. Waste of money, yes, but it also helps immensely with rebuilding. I used an interest only based plan for a year when I was rebuilding.
Once you have that income based plan going for a year or two, GW them to remove lates etc. while also building up the rest of your credit profile.
After you rebuild, refinance them, consolidate, whatever to lower the interest rates and then apply for program to extend your repayment offering period and/or do another income based plan on the new loans. Repay them as quickly as possible. Aim for an interest rate around 4%.
This will just buy you time and lower that minimum payment until you can kill the loans.
It does work, I had a 528 credit score and defaulted on mine, on time payments for a year and they lowered interest rates by a few percent and removed all late payments. Bought a house a year later.
I hate student loans, losing 500-600 a month on your DTI kills your house search. But, a broker told me that a two year in school deferment doesn't calculate them into your DTI.
Don't worry, I have about same in student loans and didn't think I could afford anything. You'll be pleasantly surprised in a year or two after your scores recover.
Don't forget to build a budget spreadsheet accounting for everything including taxes and daily expenses. This will help you when you're applying for the interest only, extended repayment and income based plans.
Rehab the loans, see if they can do an income based repayment plan during the rehab, worst case after. Some may even allow an interest only based repayment plan. Waste of money, yes, but it also helps immensely with rebuilding. I used an interest only based plan for a year when I was rebuilding.
Once you have that income based plan going for a year or two, GW them to remove lates etc. while also building up the rest of your credit profile.
After you rebuild, refinance them, consolidate, whatever to lower the interest rates and then apply for program to extend your repayment offering period and/or do another income based plan on the new loans. Repay them as quickly as possible. Aim for an interest rate around 4%.
This will just buy you time and lower that minimum payment until you can kill the loans.
It does work, I had a 528 credit score and defaulted on mine, on time payments for a year and they lowered interest rates by a few percent and removed all late payments. Bought a house a year later.
I hate student loans, losing 500-600 a month on your DTI kills your house search. But, a broker told me that a two year in school deferment doesn't calculate them into your DTI.
Don't worry, I have about same in student loans and didn't think I could afford anything. You'll be pleasantly surprised in a year or two after your scores recover.
Don't forget to build a budget spreadsheet accounting for everything including taxes and daily expenses. This will help you when you're applying for the interest only, extended repayment and income based plans.
You can but usually have to show effort with payments, prove that you have hardship and prove that your hardship will last a long time.
I've seen guys get tons of student loan debt removed and take the credit hit while making nice salaries and paying cash for everything. That was awhile ago though, like 15 years ago.
If that's an option an attorney might know some tricks to get it done.
I've seen guys get tons of student loan debt removed and take the credit hit while making nice salaries and paying cash for everything. That was awhile ago though, like 15 years ago.
If that's an option an attorney might know some tricks to get it done.
I saw a 100 point improvement on my mortgage scores and 120+ on my 08 scores within one year.
I worked out a deal with my loan company, Sallie Mae/Navient to catch the loans up over a few months and then after 12 on time payments, they removed all late payments from my accounts. Multiple 90 day lates on 3 private loans and almost 6 month lates on one federal loan.
They later let me do interest only payments after the loans were caught up during the 12 month period and that helped a ton because I had 4 charge offs to work through.
I worked out a deal with my loan company, Sallie Mae/Navient to catch the loans up over a few months and then after 12 on time payments, they removed all late payments from my accounts. Multiple 90 day lates on 3 private loans and almost 6 month lates on one federal loan.
They later let me do interest only payments after the loans were caught up during the 12 month period and that helped a ton because I had 4 charge offs to work through.