DW and I have a consumer loan with Sallie Mae Financial. Apparently, they are trying to get all of their consumer loans off their books and are offering to settle the account by letting people pay a discounted amount, ie 20% less.From what I can gather, they would list that account with the credit bureaus as 'settled account-not paid in full as originally agreed' rather than 'paid in full'.My question, is this a good idea? Will it lower my credit score?
They will probably report it as settled and yes this would negatively impact your credit score.They might also issue a 1099 for the monies that they wrote off and you might have to pay taxes on that amount.Not sure what amount of money you are talking about. If they want to agree in writing that they will mark the item as paid in full, then it is a good idea to do it. Get it in writing first before paying the reduced amount.Best of Luck.
The balance on the loan is ~1900. They will accept ~1520.
Maybe other people here can confirm that Sallie-Mae is doing this across the board.So to save $380 you might get a negative ding on your credit report. Is it worth it? Questions- 1. Are you purchasing a house or a car soon?2. Is your credit pristine or is it so-so already?3. If they want the accounts closed they may sweeten the deal by marking it as paid in full if you send the $1500 now. Get the agreement in writing before sending the money.You don't have to answer these here. just some thoughts for you.Do you have the 1500 in cash to pay them off now?There are many other factors that come into consideration to decide if this is a good deal. Saving $380 is great. Last point- Don't take this as an attack. Are they offering this to you because you owe several lenders and they think you are a risk? Offering the reduced payoff means they get theirs first.Best of Luck.
Our credit score is good. We are not behind on this loan or anything. Probably won't be making any large purchases anytime soon.DW got some proceeds from some land her mother sold, so we could pay it off with part of that. I was just thinking if we could pay this loan off, we could put that monthly payment toward another account on our debt snowball.
Because you, like me are in a debt snowball be careful about getting that ding on your credit report. If the other lenders are credit cards they could jack up their rates based on the charge-off.
Unless they will give it to me in writing that it will be reported as paid in full, I think I will pay off the whole amount now, or just keep paying as before.
it will lower your credit score and you will be responsible for taxes on the balances, just as if you received the difference in cash.So, even though it is *saving* you $380 - you will likely end up paying @ $120 of that in income taxes.Which results in not-so-much of a savings.for that amount, and since it seems you are otherwise solvent, I would pay the full amount due in the previously agreed upon timely payments.peace & settlingt
If the other lenders are credit cards they could jack up their rates based on the charge-off.I thought the new CARD act prevented lenders from doing this? Didn't it get rid of universal default?Kasha
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