Private Student Loan Relief Has Finally Arrived
Private student loans have been a serious problem for those in debt who aren’t making the salary they expected. By now you probably know that you can get deferment, forbearance or even a payment based on your income with your federal loans. However, private loans have not been as forgiving as most people would like. At least not until now.
According to the Washington Post, Wells Fargo and Discover will be among the first private student loan lenders to relax their once very strict repayment terms. Wells Fargo was the first to say it would lower interest rates for eligible borrowers starting this month and extend repayment periods in February. The bank, which has $11.9 billion worth of private student loans, anticipates the move will save borrowers thousands of dollars in interest payments over the course of the loan.
The Post also talked about Discover Financial Services process of fleshing out the terms of its own modification program. The company, which holds $8.3 billion in private student loans, is considering lowering interest rates and forgiving some debt of borrowers in dire straits. Private lenders — banks, credit unions and other financial firms that provide education loans — hold only 8 percent of the $1.18 trillion student loan market, but they get more flack than the federal government for being unwilling to work with struggling borrowers.
This is good news for people with private loans, especially if they are with Wells Fargo or Discover, but even if they are not once a few companies forge changes many other companies will follow suit. This could mean many more modifications in both interest rate reductions and more lenient repayment terms with your current lender.
Degrees of Success never suggests taking out private student loans unless you absolutely have to. If you are in this situation make sure your lender offers some relief options if you can’t afford your payments. Otherwise you could end up like the millions of people currently delinquent on their private student loans.
Have private student loans but you aren’t sure how to best manage them? Don’t wait until it’s too late. Set up your free info session today at www.meetme.so/DegreesofSuccess
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