Question: I was wondering what people’s experiences have been with either loan rehabilitation or consolidation. The people at the guarantor’s office really like to push consolidation but I would like to know more about the benefits of both. I have a pretty large debt.

Some more specific questions I have are:

1) Even though rehabilitation deletes the default entirely from your credit report, you still have the entry on your report from the previous lender who sent the loan to the guarantor. The status on this entry is usually payment after collection or claim filed with government. So even though the default is removed, wouldn’t potential lenders still be able to figure out that you defaulted on a loan from this info? How much difference does it make to actually have the default removed, rather than have a default that was paid in full?

2) Has anyone had any success with negotiating a settlement with either a guarantor or the loan consolidation program? How much do they generally take off? And does it show on your credit report as paid in full or settled for less than full amount?

3) Does the new loan (on your credit report) you have with either rehabilitation or consolidation contain any of the missed payments you had before or during default?

Any info on either program would be greatly appreciated.

Answer: I am also interested in how to handle it. I just recently talked to a collection agency and they were offering me the rehabilitation prgram where I pay 10% of the loan upfront and pay them $510 dollars a month for a $37000 Student Loan which I defaulted.

I am so depressed with this defaulted student loan and I have no idea what to do. =(

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