PLease help!! - student loan in default should I consolidate with Direct Loans?

Discussion in 'Credit Talk' started by jokgga, Jul 31, 2008.

  1. jokgga

    jokgga Member

    Hi all,

    So it turns out that I have a student loan that I completely forgot about. I had my stafford loans and private loans under forebearance but I had a perkins loan that came into effect march 08. Well I forgot all about it and never paid it until recently when I found out that my credit score was really low because I was in default with this loan. So as I am trying to gather more information, I receive a call from Direct Loans.
    The man explained that I can consolidate my stafford and perkins loan (which is in default). In addition, my interest rate would be the weighted avg (stafford -6.15% and perkins - 5.05%). He also explained that if I did consolidate, the default on my loan would go away and I would basically be getting a second chance. So he overnights me forms to fill out and says that someone will be there the next day to pick it up.
    I thought he was kind of rushing it so it felt a little fishy to me. I believe the company is legit but I am not sure if this is the best option for me if I want to improve my credit score and get the best deal possible. The return envelope allow is going to Sallie Mae which is my private loan lendor so I feel they are just trying to get me to consolidate.

    Can someone explain this to me and what my best solution is when one of my loans is already in default
  2. jokgga

    jokgga Member

    I figured out that consolidation was a good option to wipe my loan in default. But is it better to consolidate or rehab my one loan (other in forebearance). Because when I consolidate, I will probably put it into forebearance again.

    THanks again.

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