Can consolidating student loans help your credit
When your loan is rehabilitated, the default status will be removed from your loan, and collection of payments through wage garnishment or Treasury offset will stop.
To rehabilitate a defaulted Federal Perkins Loan, you must make a full monthly payment each month, within 20 days of the due date, for nine consecutive months.To rehabilitate your loan, you must choose one of the two payment amounts.Your loan holder may be collecting payments on your defaulted loan through wage garnishment or Treasury offset (taking all or part of your tax refunds or other government payments).You’ll need to provide documentation of your monthly income and expenses.Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered.
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Note: If you want to consolidate a defaulted that you obtained as a parent to pay for your child’s education, the only income-driven plan you can choose is the Income-Contingent Repayment Plan (ICR Plan).