Rehabilitation and Direct Loans

[almost_there]

Hi,

I recently completed the rehab program for a defaulted loan.  The US Dept said they would remove the account completely from my credit report.  Does any one have any experience in how long this takes?  They had been reporting at the end of the month, which in this case would have been the end of August.  Previously they'd always reported on the 30th or 31st of the month.  They didn't report at all for August.  It's now the 6th and I'm still waiting for the defaulted loan to disappear from my credit report.  Should I just sit tight or try to dispute it with the credit agencies to see if the government will validate it or not? 

Also, now that my defaulted loan is righteous again, I was hoping to consolidate it with my other loans, so I can get a lower aggragate interest rate--the loans with Sallie Mae are at 5.5% but the loan with AES (the one that was defaulted) is at 8.25%.  When I called Sallie Mae to get this done, they told me that no one is consolidating loans at the moment b.c of the cut in interest rates due to the credit crunch.  But the did tell me I could go to a company called Direct Loans.  I did go online and fill out an application.  They didn't give me  specific interest rate though and it seems that won't be calculated until the time that the consolidation actually goes through.  This worries me as I don't want to get stuck with a 7% interest rate or something.  Is it better to wait to consolidate?  It's not like I can pay the monthly bill for my loans anyway and am riding out forbearance and deferments at the moment. 

Any advice would be appreciated.

Thanks,

Almost_there

[Anonymous]

Yes- there are currently very few companies partiticapting in the federal loan consolidation program. SM is NOT participating as this time. 

You rehabed defaulted loans will be returned to a lender and any collection accounts associated will be removed. 

No gauranty (unless you got it in writting) that the defaulted loans will be removed- just the the default status will be removed and changed to "pays as agreed/ok"

Read up on the Federal consolidation program-  

Key points:

Can not be undone

1,2 or 3 year interest only payments can be selected (I selected a 2 year IO payments and paid 3x+ on the payments)

The fixed interest rate is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%,

Even the company I consolidated with June 07 no longer does Federal loan consolidations.

Do the MATH- Find a lender, set them up on auto-pay, pay more than min if you can.

[almost_there]

Thanks Timothy, but I'm a little confused.  You wrote:

 "You rehabed defaulted loans will be returned to a lender and any collection accounts associated will be removed. 

No gauranty (unless you got it in writting) that the defaulted loans will be removed- just the the default status will be removed and changed to 'pays as agreed/ok'."

Does this mean the US Dept of Educ. tradeline will not be deleted.  I was told that it would be any everything I thought I've read said it would be deleted, especially as AES is taking the loan back.  Are you saying because it's listed in Installment Accounts and not Collections that it won't be deleted? 

If it will be deleted, any one have experience in how long this will take? 

Thanks,

almost_there

[Anonymous]

I am speaking about how the rehab program is written-

When you get them deleted,, I will be impressed.

This thread makes me believe you-

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=85589&jump=true

[almost_there]

It's the 10th of the month and TrueCredit is still showing the defaulted account.  I guess I'll give them a call tomorrow.  But in reviewing my paperwork, the letter, I received from the U.S. Dept of Education after my loan was rehabbed, did say this: "We will advise the credit bureaus to delete any information reported by the Deparmetn regardeing the defaulted loan(s) sold to Suntrust."  I sure hoe this means that this blemish will completely go away.   I so need a break.  You just don't even know...