Understanding Debt & Credit

At Global Student Loan Forgiveness, we aim to provide the most helpful and actionable information to help people regain control their financial lives. In addition to helping borrowers with all areas of their student loans, we also provide information on other debt and credit solutions. You call Global Student Loan Forgiveness at (844)-832-7070 to talk to a company specialist focused on assisting borrowers & students for more information.

CREDIT AND DEBT COUNSELING

You may owe money. You may be in over your head. The truth is, most people with serious money problems do not intend to be in debt, they just end up there. Sometimes it’s the result of medical expenses or unemployment. Sometimes it’s poor money management. In every case, the way to fix your money problems is not just to eliminate what you owe, but to also address the issues that put you in debt in the first place. Global Student Loan Forgiveness will assist you in determining the best options to meet your credit and debt help needs.

What our counselors do

  • Advise you on managing your money;
  • Offer solutions to your current financial problems; and
  • Your current financial situation.
  • Provide you with a detailed review of your income, assets and expenses.
  • Provide personalized options based on your goals, which may include social service referrals, educational materials and resources and a Debt Management Plan.
  • If the Debt Management Plan is your best option we will provide you with the complete program and details.

Step One - Gathering Your Information

  • You supply information about your personal finances.
  • We recommend gathering your most recent pay stubs, credit card bills, household bills including utilities, and an estimate of how much you spend on food and transportation per month.
  • The more complete and up-to-date your information, the better our advice will be.

Step Two - Begin Credit Counseling

  • Discuss your debt and personal finance situation with your counselor.
  • Your counselor reviews your budget with you and offers targeted advice to help you control your spending.
  • Your counselor analyzes your debts and educates you about effective repayment strategies.

Step Three - Create a Plan

  • Your counselor will prepare a new budget for you based on your unique circumstances.
  • Your plan will guide you toward repaying your debts.
  • If your circumstances warrant it, your counselor may propose a Debt Management Plan (DMP).

Student Loans & Your Credit Score

Repaying Student Loans

After graduation, repaying a loan quickly and without missed payments is the best way to build and keep a good credit score. However, even with this simple rule to follow, there are a number of things to be careful of; some of them are going to surprise you.

Paying off your student loan early may actually damage your credit score. Student loans are installment loans which, unlike credit card debt (revolving credit), it does not look better to creditors to have the lowest balance possible. Future creditors understand that a student loan means there is no larger balance of available credit and that your monthly payment will not change over the lifetime of the loan.

Since paying off an installment loan early can mean a loss of income (interest) on the loan to the lender, it may actually send the wrong signal to potential future creditors and lenders.  This can mean future loans with a shorter term, but a higher interest rate so they will get a better return on their loan to you.

Delinquency And Deferment

Resolve any delinquency immediately. Although it can harm your credit score to pay off too quickly, the damage will be much worse to just leave a student loan delinquent in the hope that you will find a new job or another source of income in order to “catch up”. Once you resolve a delinquency by establishing an Income Based Repayment, Income Contingent Repayment or another repayment option, your credit rating will quickly begin climbing back to its per-delinquent level.

Student loans taken out with a private lender have fewer repayment options than a federal student loan.  Even so, most banks will work with you to help not just you and your credit score, but to keep “bad” loans off of their books.  No bank manager or loan officer wants to have to answer about why a loan is delinquent and have to go through the process of attaching paychecks if they can find a solution agreeable to both parties. The key here is to notify your lender before you miss a payment and to set up a new repayment plan.  If it is too late for that, then you will need to establish a new repayment plan quickly and follow up with the lender and the credit reporting agencies to make sure any bad information about it has been updated to show a repayment plan is now in place.

A student loan in deferment or forbearance will NOT hurt your credit score. Payments are not required when a loan is deferred, so you cannot be late in making them. If you need a short term of relief from a student loan to get your finances back on track, or to deal with an unexpected expense such as an extended hospital stay, then this is definitely an option for you.

Good Credit Loans

As mentioned above, student loans are installment loans. They are weighed less against your credit score than other types of loans and much less than credit card debt. This also makes them an excellent way to add history and diversity to the credit score of a new college graduate that might not otherwise have a credit history except for a credit card or two. This is also a loan that is supposed to improve earning potential and not to spend on a luxury item. All of this puts student loans, federal or private, in the category of “good credit”.

Federal Student Loan Advantages

Unlike private lenders, federal student loan lenders do not report past due accounts until they are 60 days past due and even then, until the end of that month. This provides a federal student loan holder additional time to pursue repayment options or request deferment for the loan.

When deferment is granted, federal student loan lenders report it to the credit agencies automatically; in some cases, they will even backdate it if appropriate. As an example; if you return to school to pursue another degree, but did not file the appropriate notification paperwork, the period for which your loan was delinquent can be removed from your credit history once everything has been filed correctly.

Alternatives to Credit Counseling

Credit counseling educates consumers about how to repay their debts and better manage their personal finances. This one-on-one counseling is customized to the client’s unique situation. An Global Student Loan Forgiveness-certified consumer credit counselor can help consumers by crafting a new budget and debt repayment plan, all of which is informed by the client’s own financial information. Some clients need the additional help of a formal Debt Management Plan, though the majority benefit from credit counseling alone.

There are no eligibility requirements for obtaining counseling assistance. You submit information about your income, living expenses, and debts, which your counselor will use to create a personalized action plan and budget to help you repay your debts.

Debt Management Plan

For some clients, prudent budgeting is not enough to make ends meet. A Debt Management Plan brings additional concessions that can lower monthly debt payments and make it possible to repay debts.

It’s unlikely that anyone struggling with credit card debt will be given a consolidation loan, but a debt management plan does consolidate all of a client’s monthly credit debt payments into one convenient payment.

Debt Negotiation

It may be possible to get debt relief by negotiating with individual creditors, but this leaves you at the mercy of the individual collection agent you speak to, and doesn’t address your entire financial situation.

Debt Settlement

Settlements involve paying less than the amount you owe to make debts go away. If a creditor agrees to settle a debt with you, the resulting notation on your credit report will severely damage your credit rating.

STUDENT LOAN DEBT COUNSELING AND ADVICE

These experts will then guide you, based on your personal situation, to ensure your payments remain affordable and minimize their impact on your current finances and future plans. Specifically, we will help you understand:

  • The pros and cons of the programs available to you.
  • Strategies to reduce the total amount of interest you pay over the life of the loan.
  • Steps to take to ensure timely repayment.
  • What you can do if you have trouble making your payments.
  • Options for keeping repayment affordable.
  • Loan rehabilitation programs.
  • Student loan debt consolidation choices.
  • How to identify potential options toward cancellation and forgiveness.

Global Student Loan Forgiveness - Debt & Credit Counseling

At the end of the counseling session you will feel good knowing that there are options available and that you are not alone. Global Student Loan Forgiveness is here to help and provide you the best debt solutions for you and your situation. You call Global Student Loan Forgiveness at (844)-832-7070  to talk to a company specialist focused on assisting borrowers & students for more information.