Consolidate VS Rehab

Discussion in 'Credit Talk' started by tony_vo, Nov 26, 2001.

  1. tony_vo

    tony_vo Member

    How good my credit will be after I consolidate my student loans?

    Will "collection pay in full" disqualify me from apply a home loan?

    Thanks!
     
  2. Hermit5

    Hermit5 Well-Known Member

    I'm just starting to look into this myself.

    My understanding is consolidation doesn't get rid of negatives on your report but rehab does after 12 timely payments.

    Please post if you have new information.
     
  3. roni

    roni Well-Known Member

    You are right. Consolidation doesnot remove the negatives just the outstanding balances/debt which may help a little overall. I have done rehab and consolidation.
     
  4. Andrew

    Andrew Well-Known Member

    Definately Rehab!

    Don't make the same mistake that I did...I listened to NCO, the collection agency that PHEAA (Pennsylvania Higher education Assistance Agency) contracted to collect my defaulted loans. They told me that I could rehab my loans by paying $1600.00 now and $650 per month!!! I don't have that kind of money, so I consolidated and am now screwed.

    PHEAA then told me after I sent a complaint letter after discovering the truth that I could have rehabbed my loans with a payment that fit into my budget. Too late...? Maybe not. I'm letting my attorney figure that out.
     
  5. EdG

    EdG Well-Known Member

    Rehab, Rehab, Rehab

    Andrew your story is very similar to mine except I had ASA for my loans.
     
  6. Andrew

    Andrew Well-Known Member

    So, were you able to get this resolved? If so, what route did you take?
     
  7. EdG

    EdG Well-Known Member

    I have not yet resolved this problem, but I do have a strategy. I have several documented incidents where ASA and their collection companies have violated my rights. They also received my 2000 tax refund several months after my loans were paid in full. I have requested several times to get this money back, they refuse. Next month I will make my 12th on time payment of my consolidated loan. My University was the guaranteeor on several of my loans. They have agreed to delete all negative information on my credit files pertaining to their loans even though I already consolidated and they have no obligation to delete. I am going to try this method with ASA or drag them into court. I'm not positive this will work but it's worth a try. I'm also going to dispute the loans with EX and TU again. During a dispute last year with EQ all my loans were deleted.

    Ed
     
  8. roni

    roni Well-Known Member



    NO, you're not screwed.... There is nothing in the Higher Education Act that says you can not rehab a consolidated loan.... It just says 12 on time payments. You have to enforce the law with these people. YOu can get the negative student loans off if you've made 12 on time payments (or early!)...

    www.edu.gov search and read the Higher Education Act.
     
  9. Andrew

    Andrew Well-Known Member

    Thanks Bkev...I might be coming to you for more advice if you don't mind...
     
  10. EdG

    EdG Well-Known Member

    BKev is right on target here. In fact I think I developed my strategy for BKev. Kudos to BKev for the good information.
     
  11. cjd

    cjd Active Member

    How does rehab work? Do you have to default and go to collection or what? I had one late payment in 99 and heard about rehab here, so I talked to the student loan holder and they said they don't have to delete negative information because I didn't default.

    What's the story here?
     
  12. roni

    roni Well-Known Member

    They're right. You can dispute the late pay with CRAs, but if does not come back verified it will delete the entire tradeline.
     
  13. PsychDoc

    PsychDoc Well-Known Member

    Unfortunately, you can only rehabilitate a loan if it has entered default status. What a paradox! If you're simply 150 days late, there's no way to rehab that. On the other hand, if you let it default, then rehabilitate, the negative notations must be removed.

    Doc
     
  14. Hermit5

    Hermit5 Well-Known Member

    and that takes one year or 12 payments?
     
  15. roni

    roni Well-Known Member

    12 on time (or early) payments......
     

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