What are the main advantages of the rehabilitation option when dealing with a collection agency?

Answer: Rehabilitation lets you remove your loan from a defaulted status after making a series of consecutive on-time payments--generally, nine payments.

If you are behind on your federal student loan payments and being contacted by a debt collector, you may be able to arrange for rehabilitation of your loan. Rehabilitation lets you remove your loan from a defaulted status after making a series of consecutive on-time payments (generally, nine payments). If you make the required series of on-time payments, the lender should remove the default notation from your credit report, which will have a positive impact on your credit report. In addition, you only need to make a payment that is reasonable and affordable for your financial situation.

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