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Student Loan Interest; contract vs. judgment
Believe it or not...
Given that the federal judgment interst rate is less than 2% and most student loans are 8% or higher, a debtor with defaulted federally insured student loans is much better off (credit score concerns aside) stipulating to judgment with a payment plan than continuing with payments under the original contract.
Interest savings on a $100,000 student loan at 8.25% versus 1.67% federal judgment interest paid over 60 months is $18,075. At 12% contract rate, the savings is $29,165.
You rock. That's why Blockbuster's offering you one month of Blockbuster Total Access, No Cost.
Believe it or not... Given that the federal judgment interst rate is less than 2% and most student loans are 8% or higher, a debtor with defaulted federally insured student loans is much better off (credit score concerns aside) stipulating to judgment with a payment plan than continuing with payments under the original contract. Interest savings on a $100,000 student loan at 8.25% versus 1.67% federal judgment interest paid over 60 months is $18,075. At 12% contract rate, the savings is $29,165.
You rock. That's why Blockbuster's offering you one month of Blockbuster Total Access, No Cost.
The post was migrated from Yahoo.