I have the current dilemma regarding my student loans. When I first went to college I had to get a loan as soon as possible in order to stay in the dorms, so without proper research, I ended up applying for a $40, 000 private loan through Teri.
A year later once realty set in my head that I won’t be able to pay for the loan with the rate the school was charging me ($30, 000 a year school) I ended up transferring to a cheaper school ($4,000 a year school). At the cheaper school I was able to obtain subsidized loans.
By the time I graduated I owe Direct Loans a total of $15, 000 which includes the interest. I’m currently consolidating my Direct Loan which is still in pending status but they advised me my monthly payment would me $96 compared to the $162 they wanted me to pay under the standard rate. The $96 is a reasonable amount I can deal with every month to pay my loan. On the other hand, the private loan I currently have is a total of $58,109.35 which has a 3.830% this is the breakdown of the loan:
1st loan $14,505.11 with 3.830% interest, $88.47 would be the monthly payment
2nd loan $43,604.24 with 3.830% interest my monthly payment is $255.58.
My total monthly payment for the private loan would be $344.05 which will begin in January. This is not including the aditional $96 I will be paying for the Direct Loan but the total of both will have me coughing up almost $500 a month (this is almost rent).
Ever since I graduate I’ve been trying to apply for a consolidation loan to lower the payment. Terri previously had a consolidation team but because of economic crisis they no longer offer the benefit they did advise however, once I receive the first bill if I can’t afford it they can lower my payment to half the amount for two years, once the two years are up the payment will go back to the regular amount.
I contacted Chase bank and they said they don’t consolidate private loans. I applied with Well Fargo’s Bank and they denied for income insufficient for both me and my co-signer. The representative at Wells Fargo explained to me because of the economic crisis a lot of banks stop offering consolidatation loans so those that do still do them have become more stricter.
Where can I go for help I feel like I’m stuck with a heavy payment that will force me not to pay it ( of course I will never not pay it but it will force me to go a couple of days without eatting in order to satify the bill, and I’m not joking). I’m interested in doing the half payment option once I receive my first bill but it seems like there are no companies, at least during these tough times that does not consolidate private loans.
I’m currently working Full time ($39,000 a year), but because of the living expensive in New York City (my home) my check is stretched to cover basic necessities. I want to know if there’s a way I can lower my payment to at least to $250 so that I can pay everything I need to without any problems. Are they any programs that can help me with my school debt or a company that I can go to that will help me consolidate? I don’t have any problems paying other bills (credit card, rent, car payment etc ) as they are always paid on time and in full I also have great credit but I feel that after a while the school loan will become a huge problem. HELPPP!!!
There is no good news here. Private student loans are a trap. TERI (The Education Resources Institute) did make student loans but they’ve stopped that now. They went bankrupt. This is not the first time I’ve run into TERI loan problems. You might want to read Can I Eliminate and Discharge My Student Loans With Bankruptcy? – Matt.
Private student loans are not required to offer you any payment reduction options. In fact, your interest rate with TERI is pretty good.
One option, depending on the level of your other debt, would be for you to go bankrupt to discharge that so you have enough money to pay the student loans.
I’m concerned that while the TERI payment reduction proposal looks interesting it will in fact increase your loan balance by over $4,000 if you do it. During that time your loan will still be ticking away at the current interest rate but your half payment won’t be enough to pay all the interest each month. I imagine that shortfall will be added to the balance, just like one of these horrible Option ARM mortgages people are getting foreclosed on.
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