Navient Settlement: 66K Borrowers Get $1.7 Billion Student Debt Canceled

Borrowers who qualify for private loan debt cancellation will receive a notice from Navient by July 2022 and will be refunded any payments made on canceled private loans after June 30, 2021.
A major student loan servicing company has reached a settlement that will cancel .7 billion in student loan debt for around 66,000 borrowers, as well as provide million in restitution – around 0 each – to 350,000 borrowers.
According to the settlement statement, borrowers who qualify don’t need to take any further action other than to make sure the U.S. Department of Education has their current address through their studentaid.gov account.

  • Redirecting borrowers into forbearance instead of pushing them toward more sensible income-based repayment options.
  • Through its predecessor, Sallie Mae, directing borrowers to subprime loans that they knew would likely default.

Federal loan borrowers receiving the approximate 0 restitution payment will receive a postcard from the settlement administrator in the spring of 2022.
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How to Find Out if the Navient Settlement Affects You

While wholesale student loan forgiveness remains a distant possibility, it’s best to use the extended forbearance period to your advantage and make a debt payoff plan.
If you’re nearing retirement and still owe on student loans, here are six ways to cope.
If you’re unsure who your loan servicer is, you can easily find out by logging into your account at studentaid.gov.
Ready to stop worrying about money?
You should be able to identify the types of loans you have as well as your servicer through your account dashboard. Or you can call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

Tips for Anyone Struggling With Student Loan Debt

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Here are some strategies for paying down your student debt — fast and forever — including checking into whether you qualify for Public Service Loan Forgiveness.
“Today’s settlement corrects Navient’s past behavior . . . and puts in place safeguards to ensure this company never preys on student loan borrowers again,” said Pennsylvania Attorney General Josh Shapiro in a statement. 
Here’s what you need to know about the settlement. <!–

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Navient’s settlement with attorneys general in 39 states is over two primary accusations:

Paying Down Debt Takes Discipline

This page may include affiliate links. Please see the disclosure page for more information. This blog post is part of the Pay Down My Debt (PDMD) blog tour, sponsored by US Equity Advantage. PDMD is a solution that accelerates debt payoff and helps consumers monitor their credit …

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Can a Debt Collector Garnish Your Wages?

Creditors and debt collectors use wage garnishment to recover money owed to them. In most cases, the debt collector will require a court judgment against you before they can take money from you. However, wage…

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Here’s What to Do Before Debt Collectors Start Calling

Take your car insurance bill, for example. When’s the last time you checked car insurance prices, anyway? You should shop your options every six months or so — it could save you some serious money and help you avoid missed payments.
Make sure your bad credit doesn’t give the debt collectors more ammo to use against you. Sign up for free (it only takes about 90 seconds) and see how much you could improve your score.
Kari Faber is a staff writer at The Penny Hoarder.
***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

1. Get Rid of Dings on Your Credit Report and Raise Your Score

If you went to the hospital without insurance or you haven’t met your deductible yet, doctors’ bills can be pretty steep.
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A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.
If your bills are lower, there’s less of a chance you’ll miss a payment due to lack of funds. And no missed payments means no debt collectors calling you every single day. But a lot of these money-sucking bills are ones you can’t cancel.
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates — some up to 36%. But a website called AmOne wants to help.
Most Americans have some sort of debt — and not all of it is good debt, like a mortgage, car loan or student loans, which are considered good investments.

2. Stop Paying Your Credit Card Company Insane Interest Rates

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The good news? A free website called Credit Sesame makes it easy to put your credit score on track to reach your debt-free goals. We even talked to one guy, James Cooper, of Atlanta, who used Credit Sesame to raise his credit score nearly 300 points in six months.*** He says they showed him exactly what to do — he was even able to open his first credit card.
Using Insure.com, people have saved an average of 9 a year.
What could adding 300 points to your score mean for your goals? It could easily save you thousands of dollars over the life of a car loan or mortgage.
Yup. That could be 0 back in your pocket just for taking a few minutes to look at your options.
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3. Lower Your Bills to Avoid Missed Payments

While it doesn’t make the debt disappear (you are still liable for these payments), a payment plan makes paying off these debts more manageable and will keep the debt collectors off your back so long as you make each monthly payment.
If you have a low score with a few dings on your report, you won’t get access to decent interest rates on your loans. That means you’ll be paying more in interest and less on the actual loan amount — taking you sometimes years longer to pay it off and thousands of dollars more. If it’s a mortgage, the cost of your poor credit score could mean tens of thousands of dollars gone to waste.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 2.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
Thankfully, doctors and hospitals can be willing to work with you. Some medical providers will offer a discount if you’re strapped for cash, and most are open to payment plans. So instead of 0 out of pocket today, you could be paying a little over a month for the next six months.
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape and the debt collectors will set up camp on your doorstep forever…

4. Try to Negotiate Your Payments and Get On a Payment Plan

In just 90 seconds, Credit Sesame will give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).
Ready to stop worrying about money?
You don’t need a perfect credit score to get a loan — and comparing your options won’t affect your score at all.  Plus, AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
Debt happens.
Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.
What does your credit score have to do with debt? Turns out — it can be a major factor in you getting out of debt quicker. <!–

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Credit card debt, medical debt, overdue bills and high interest loans are just a few of the types of bad debt that can wreak havoc on your life. They can destroy your credit, snowball into even more debt and, yep, have the debt collectors hounding you to pay up.

How to Use the Debt Lasso Method to Pay Off Debt Faster

Remember how we talked about the importance of committing because of later temptations? Here’s where that comes into play.
By automating your payments, you’ll be less tempted to reduce the amount when your minimum payment goes down — sort of an out-of-sight-out-of-mind mentality.
And don’t limit yourself to credit card offers. Using a personal loan to pay off multiple cards has the same effect.
Before you reach the end of a zero-interest period, start looking for other offers that allow you to transfer your balance so you can avoid getting socked with the new higher interest rate on your old card.

What Is the Debt Lasso Method?

Auten and Schneider should know: They started their own debt lasso journey with ,000 in credit card debt. After years of poor financial choices, the couple was sitting on the floor of their basement apartment when they realized that their debt would never allow them to buy a house or enjoy life the way their friends were.
Yeehaw!
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Who Should Use the Debt Lasso?

Decide on an amount greater than your total minimum monthly payments that you can reliably put toward your debt every month.
So if you have ,000 in credit card debt and your gross income (before taxes and other deductions are taken out) is ,000, you’re a good candidate for the debt lasso. But if you have ,000 in credit card debt with the same salary, you may want to seek other assistance to help you pay off your credit card debt.

Pro Tip
We’ll look at all the pieces, but let’s first decide if the debt lasso method can help you.

And if you’re wondering when you’ll reach the end of your debt lasso, they include a calculator on debtlasso.com to help you figure out how long it will take to pay off credit cards based on your interest rates and debt amounts.
Stop using your credit cards. No exceptions.

How the Debt Lasso Method Works

This portrait shows a gay couple sitting on a couch together in the mountains after being married.
Developed by David Auten, left, and John Schneider, the married couple known as the Debt Free Guys, the debt lasso method involves corralling your high-interest debt into a low-interest one so you can pay down the principal balance more quickly. Photo courtesy of Studio Lemus

To determine if the debt lasso method is right for you, start by adding up how much you owe in credit card debt. Then compare that total debt to your annual income. If your debt is less than half of your income, the debt lasso method could work for you.

1. Commit

After you’ve paid down a portion of your balance, your credit card company tells you that your new minimum payment is only . Yay! But that doesn’t mean you now have to spend — you should continue paying 0 each month, sending even more money toward your principal balance.
Saving your cash for now will let you build an emergency fund in case you do lose income. And if it turns out that you end up with an extra nest egg, consider it a bonus payment as you return to the debt lasso method.
Start with the easy wins by paying off any credit cards that have low enough balances to knock out in less than six months.
You can still benefit from the lasso method by negotiating a lower interest rate with your current credit card company or transferring the balance to a card with a substantially lower interest rate than what you’re currently paying.

  1. But if you have a less-than-stellar credit score, those offers may be tough to come by. Don’t give up.
  2. Remember that you’ve committed to not using your credit cards (see Step #1). So hold onto the ones you’ve paid off. Why?

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2. Trim

Developed by David Auten and John Schneider, also known as the Debt Free Guys, the debt lasso method involves corralling your high-interest debt into a low-interest one so you can pay down the principal balance more quickly — and for less money.
You may have multiple credit cards, but we’ll keep the example simple with one card: When you began your debt lasso journey, your minimum monthly payment was , so you committed to paying 0 on your credit card — 0 extra each month.
Time to saddle up.

3. Lasso

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So they made a two-part commitment — which you’ll also need to do if you want to use the debt lasso method:
You cannot successfully use the debt lasso method unless you’re willing to commit.
Automating your minimum monthly payments for all but your lassoed credit card will allow you to focus on paying off one debt at a time. But automating your payments can do even more to help.
But if you fall somewhere in between, the lasso could help you pay off debt in a shorter amount of time and with less interest.
Compared to the average rate on credit cards, which was 17.13% in the third quarter of 2021, personal loans offered a better deal at 9.39%, according to the Federal Reserve.
If the debt avalanche and snowball methods leave you feeling a bit cold when you think of all the interest you’ll end up paying, consider the debt lasso method.
This is no time to put your debt payment strategy out to pasture. Monitoring your accounts is an important last step, as those credit card rates can run wild if left unattended.
Each time you pay off one credit card, put your money toward paying off the next highest balance.
“That was our particular rock-bottom moment, realizing that here we were in this financial and literal hole,” Schneider said.
Although opening new accounts could temporarily hurt your credit score, Auten and Schneider emphasized that the long-term benefits of paying off debt faster can help counteract that effect.
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder who is fully committed to corny puns. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

4. Automate

“If you do get an offer and then you end up not being able to make your payments, then you could get stuck with an interest rate that’s 25 to 30%,” Auten said.
Ready to stop worrying about money?
Although it may be tempting to pay every dime toward your debt, don’t drain your emergency fund when practicing the debt lasso method.
The early victory not only offers a psychological benefit but also helps your credit score.
If you’ve read about other debt payoff methods, you might be wondering if the lasso method is just a balance transfer. Auten and Schneider get that question a lot.
Ready to wrangle in that credit card debt?

5. Monitor

This woman monitors her accounts online.
Getty Images

Maintaining those credit lines will decrease your credit utilization, which accounts for approximately 30% of your credit score. And the higher your credit score, the better position you’ll be in when you’re ready to lasso.
Want to learn more? Auten and Schneider told us all about the debt lasso, including who it can help the most — and who shouldn’t use it.

Credit card agreements often include a clause in the fine print that allows them to raise your interest rates if you miss a payment during the zero-interest offer period. Some will even sneak in the right to recoup any money you saved previously during the promotional period at the new interest rate.
The takeaway lesson: Read the fine print.

Who Should NOT Use the Debt Lasso Method — For Now

A word of warning: If you’re in an industry where you could be furloughed or laid off suddenly, you should probably hold your horses — and your cash.
If you have a good or excellent credit score, finding a zero-interest offer where you can transfer your highest interest credit card debt should be your goal.
Committing to the process is essential, Auten and Schneider said, as it will help you later when you may be tempted to stray off course.
If you still have additional higher interest balances, prioritize paying off the credit card with the highest interest rate first.
You also might not benefit from taking up the lasso if you can realistically pay off your credit card debt in six months, since the associated fees (typically 3% to 5% of the amount being transferred) could cost you more than you’d save by taking advantage of a lower interest rate.
“The reality is that a central piece of the process is doing some sort of consolidation — whether that’s a balance transfer to a zero-interest credit card or a low-interest loan,” Auten said. “But a lot of people forget those first two pieces and the last two pieces.”
A card that doesn’t have a balance means you have more available credit, thus helping improve your credit score. And a higher credit score will help you get approved for another zero-interest credit card.

Putting all of the extra money toward your card with the highest interest rate will help you pay the least amount of interest over time. And that’s where the last step becomes crucial.

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“To get you from 20% to 25% down to a 9% to 15% — that’s a great first step,” Schneider said.

Debt In The United States

This page may include affiliate links. Please see the disclosure page for more information. Let’s face it, debt in the United States is a problem. From our national debt, student loan debt, and consumer debt. Debt in the United States is a problem on all levels. Why …

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Statute of Limitation on Debt Collection

Debt collectors are well known for the way they do business. They’re much more concerned with getting paid than with how they go about collecting the debt. As long as they can get a consumer…

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Best Personal Loans for 2020

Maybe it was an unexpected dental procedure, or a tax bill you didn’t plan for, or a car repair that came out of nowhere.

Whatever the reason, if you need money quickly, a personal loan can deliver it.

As you shop for a personal loan to solve your short-term problem, look for loan terms that won’t hurt your long-term financial life.

7 Best Personal Loans & Lenders for 2020

Online lending has opened a new world of personal loan options. 

Not that long ago we had just a couple of legitimate choices:

  • Your Local Bank or Credit Union: You can usually borrow money at a decent fixed interest rate at your neighborhood bank or credit union. The downside: You’d need to make an appointment or at least spend an hour or two on the phone.
  • A Credit Card: It’s hard to beat the convenience of a credit card, but the interest rates, late fees, and over-the-limit charges can make this option too volatile.

We still have these two options, and sometimes they can get the job done. But we also have scores of online lenders that compete to give you installment loans with more competitive interest rates. You can also finalize loans and receive money more quickly online.

Here are some of the best personal loan choices:

  • Credible
  • LendingClub
  • Payoff
  • PersonalLoans.com
  • Prosper
  • SoFi
  • LendingTree

Credible Personal Loans

I’m starting here because Credible isn’t a lender. It’s a way to connect with and compare a variety of lenders, including several from lower on this list. To start the process, you’ll submit Credible’s initial application which generates up to six loan offers.

This initial process will run a soft check of your credit score which shouldn’t hurt your score the way a hard check can. If you like one of the offers, you can complete the next steps to apply for the loan which will, of course, result in a hard credit check.

Pros & Cons of Credible Personal Loans

Pros:

  • An efficient way to compare loan offers
  • Fast and easy application process
  • Many quality participating lenders

Cons:

  • Not for people with credit scores below 640
  • Could result in unwanted phone calls from lenders

LendingClub Personal Loans

I was an early fan of LendingClub back in 2007, and I still recommend this trailblazer in the peer-to-peer (P2P) lending market.

Rather than using bank funds, P2P lenders finance your loan with money from investors. You’ll still have to go through an application process, but LendingClub has opened new doors to people who don’t want to borrow from a bank.

  • Loan Amount: LendingClub’s maximum loan amount is $40,000. You can repay the money in terms ranging from three to five years. 
  • Costs: Interest rates typically range from 7 to 36 percent depending on your qualifications. The higher your qualifications, the lower your rate.

LendingClub continues to evolve. It now has debt consolidation loans and allows for co-signers which lets more people borrow.

Pros & Cons of LendingClub Personal Loans

Pros:

  • Credit scores of 600 can get approval
  • New co-sign option lets more people borrow
  • Debt consolidation loans available
  • No prepayment fee

Cons:

  • Loan origination fees (1% of loan)
  • Check processing fee ($7)

Payoff Personal Loans

As the name indicates, Payoff Personal Loans specializes in debt consolidation, helping you pay off other debts. You can potentially save money by having fewer loans and paying a lower interest rate.

The payoff isn’t a good option for people with shaky credit, though. 

You’d need a score of 650 to 660 — and a few years of credit history on your report — to get approval at a decent interest rate. So don’t wait until you’ve already fallen behind on your other debts to consolidate with Payoff.

  • Loan Amounts: Eligible borrowers can get up to $35,000 to pay off other lenders such as credit cards, auto loans, or other personal loans.
  • Interest Rates: Loans range from about 6 to 25 percent depending on your borrowing credentials.

Pros & Cons of Payoff Personal Loans

Pros:

  • No late or check processing fees
  • No prepayment penalty
  • See interest rate without a hard credit check

Cons:

  • Not for people with shaky credit
  • A loan origination fee of 2% to 5%

PersonalLoans.com

Applicants with rocky credit histories appreciate PersonalLoans.com because the site lends to people with credit scores as low as 580.

  • Loan Amount: You could borrow up to $35,000 on a six-year (72-month) payback plan through PersonalLoans.com. Spreading money across six years can lead to lower monthly payments.
  • Interest Rates: This sounds like a friendly situation, but remember you’ll pay higher interest — up to 36 percent — if you have a lower credit score, and the interest can increase your monthly loan payment significantly.

Pros & Cons of PersonalLoans.com

Pros:

  • Available to credit scores 580+
  • Easy-to-use online application
  • Up to 72-month term loans
  • Access money within a day

Cons:

  • Wide range of interest rates (5.9%-35.99%)
  • Uses a third-party lender

Prosper Personal Loans

Many borrowers like the way Prosper Personal Loans gives them a platform to share why they need to borrow money. This opportunity comes during the application process to this P2P lender. You can use this platform to appeal directly to the investors who would be funding your loan.

Of course, the numbers will tell their story, too: You’d need at least a 640 credit score to get funding, and Prosper’s rates range from 6.9 to 35.99 percent APR.

  • Loan Amount: If you qualify, you could borrow up to $40,000 with payments spread over three to five years.
  • Interest Rates: Prosper also offers a wide range of rates, from 6.9 to 35.99 percent.

Pros & Cons of Prosper Personal Loans

Pros:

  • Soft credit check to see terms
  • No prepayment penalties
  • Fast and efficient service

Cons:

  • Higher interest for lower credit scores
  • Origination fee can reach 5%
  • Late fee is steep ($15 or 5% of payment, whichever is higher)

SoFi Personal Loans

SoFi has become a standard in student loan consolidation, but the lender also has personal, unsecured loans for non-academic borrowing.

SoFi stands out because the lender does not focus exclusively on an applicant’s credit score. This can be misleading because you’d still need a 680 or higher to get a loan.

But SoFi will not deny a loan if you have a short credit history as many lenders do. Instead, this P2P lender will consider your career and earning potential. In this way, SoFi can be a good fit for young professionals starting new careers.

SoFi calls its borrowers “members” and hosts social gatherings in major cities for members which can lead to networking opportunities.

  • Loan Amounts: SoFi will lend up to $100,000 which is significantly higher than most online lenders.
  • Interest Rates: SoFi’s rates range from 5.75 to about 17 percent.

Pros & Cons of SoFi Personal Loans

Pros:

  • Larger loan amounts (up to $100,000)
  • Good for someone with a short or thin credit history
  • Flexibility to change due dates
  • No loan origination fee

Cons:

  • Funding can take up to 7 business days
  • 680 or higher credit score required

LendingTree Personal Loans

I started this list with Credible, an aggregator, and I’ll conclude it with a nod to another aggregator.  LendingTree helped establish one-stop shopping for loans back in 1998, and the service has continued to lead the industry.

Like Credible, LendingTree turns one application into loan offers from a variety of lenders. You’ll still need to assess each offer on its own merits, but LendingTree can save you a lot of legwork.

Pros & Cons of LendingTree Personal Loans

Pros:

  • Efficient way to shop
  • Trusted leader in the field

Cons:

  • Can send too many loan solicitations 

Other Personal Loan Options to Consider

My list of best personal loan providers above includes most well-known lenders. You’ve probably heard of most of them already.

Below I’m including a list of lesser-known options that have gotten my attention for various reasons. Most of these are loan matching services with P2P funding sources.

AmOne

AmOne has been around 20 years and has about a million customers. I like the company’s versatility. It can handle all sorts of borrowing needs, including personal loans.

  • Amounts: Loans range from $1,000 to $100,000.
  • Interest rates: You’ll find a wide range, but highly qualified borrowers should get competitive rates. 

Fiona

Fiona provides another loan-matching service similar to Credible or LendingTree. The service hasn’t been around long, but it’s growing quickly by partnering with a lot of the lenders on this list.

Fiona works quickly — many applicants have funds within a business day.

Monevo

Yet another loan shopping service, Monevo stands out because of its speed and its high loan amounts. You could borrow $100,000 through the site.

I like the site’s simplicity and its large volume of partnering lenders which means a wider variety of borrowers can benefit.

Federal Trust

Federal Trust partners with Fiona, which I listed above, to match loan shoppers with potential lenders. 

You could borrow up to $100,000, and with such a wide variety of lenders in their network, Federal Trust can find competitive rates for eligible borrowers.

I also like Federal Trust’s option of a seven-year installment loan for someone who needs to keep loan payments as low as possible.

Will A Personal Loan Work For You?

Yes, personal loans can help get you out of a tough financial spot. But they’ll also cost you money for months or years, depending on how long you need to pay back the loan. 

It goes without saying: You should always look for the lowest, fixed interest rates when borrowing. 

Here are some other ways to save money when you borrow:

  • Look for Shorter-Term Loans: Monthly payments will be higher with shorter-term loans, but you’ll pay less money over the life of the loan. If you can afford the higher payments, go with a shorter-term loan.
  • Avoid Fees: Even if you’re getting a lower interest rate, be sure the lender isn’t compensating by charging high origination fees or punitive late fees that could eclipse your savings on interest. 
  • Pay it Off Early: Look for a loan with no prepayment penalty, but even if you would incur a prepayment fee, consider whether this fee would exceed the interest you’d be paying over the life of your loan. 
  • Avoid Borrowing: Maybe this isn’t the time or place, but as a financial advisor I have to say it: If you can save up an emergency fund, you may be able to avoid borrowing in the first place. I recommend having at least three months of income in reserve. Then you can borrow from yourself in an emergency. Maybe it’s too late to save for the current emergency, but this is something to think about when life gets back under control.

Wherever you borrow — online or at a neighborhood bank — try to look out for your future as well as your present financial situation.

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