Some may consider using debt settlement when they are unable to pay off student loans

12/13/2009

May people may be having trouble trying to pay off debt tied with their education, though they do have options available.

In a recent posting on her website, personal financial expert Jean Chatzky noted that people who are facing impossible student debt payment should contact the firm that they own money to because the lender may be willing to talk about debt settlement as an option.

"If you'd like to settle up for less than you owe, you're going to need to be able to make a large payment in a lump sum," Chatzky wrote.

Chatzky noted that some lenders may also be willing to set up a repayment plan for the loans. In the end, lenders would rather get some of their money rather than none at all.

Of course, consumers need to keep in mind that opting for debt settlement can affect a person's credit score. A settlement's effect on a credit score, however, won't be as bad as declaring bankruptcy, which can lower a score by as much as 240 points.

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