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Consolidating private student loans- HELP!
December 29, 2017
3:57 pm
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Lauren
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Hi Sherpa,
I need help! I am 29 years old, and in a LOT of debt. Unfortunately, when I was going away to college, I was in a mentally abusive environment, and had no adults in my life to financially guide me to make decisions. So, at age 17, i took out all of my college tuition (expensive, might I add) with private student loans with variable interest rates (co-signed by my mother). The loans are from multiple lenders.
Now, I am over $200K in debt, and my interest rates keep rising. My total monthly payments for all the loans come out to about $2400/month. This is not sustainable, and I have to live paycheck to paycheck.
I continued to take out loans after college to go to graduate school, but i got smart and took out federal loans instead of private. I now work in a public school, so I am set up to have those forgiven after a few more years, so I am not concerned about those.

My credit is fair (About 675)…but I won’t be able to pay all these private loans for much longer. I really would like to consolidate the loans and get them on a fixed interest rate so I can start getting myself out of debt and save some money. I have applied to consolidate the loans three different times, and have gotten denied each time, and I was told the reasons were because my debit to income ratio is too high. how can I ever help myself and get out of debt if nobody wants to help me? my debt to income ratio will be too high forever at this rate. I have thought about filing for bankruptcy, but my mom is still attached to the loans as co-signer, so based on my research bankruptcy won’t be an option.
Since nobody will accept my applications to consolidate, I feel helpless and out of options. I am trying my very best to make all my payments (have had some late payments, and i missed 1 payment one time which got reported to the credit bureau), but I won’t be able to maintain this for much longer.
Do you have any advice for me?
Thanks!

December 29, 2017
5:32 pm
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Indiana
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Forum Posts: 321
Member Since:
May 3, 2014
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Hi Lauren,

Unfortunately, dealing with large amounts of private debt is one of the most difficult issues in the student loan world. Your instinct to try to lock in lower rates is a good one, but most refinance lenders try to target the lowest risk borrowers, so the people who actually need these services often have the most difficult time getting them.

Making the minimum payment on all of these loans will be a long difficult road. I’d suggest reaching out to all of your lenders and trying to get lower payments, or better yet, a lower interest rate. If the lender is no help or only offers a forbearance or deferment, don’t be afraid to file a complaint with the Consumer Financial Protection Bureau.

Once you have the payments as low as possible. Try to pay off either your highest interest loan or the one with the lowest balance. Little bits of cash that you have to pay down the loan can make a big difference in the long run.

One other thing to keep in mind. Your student debt situation may be at the hardest point right now. As your income increases or your debt level decreases things will get easier.

I wish I had more tips or tricks for you, but this is an area of the law where all the rules seem to favor the lenders over consumers.

Best wishes!

Michael

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