If you’ve missed payments on your student loans, you’ve probably seen your credit score take a hit. But if you could get those negative marks removed with a student loan goodwill letter, you could see an immediate jump in your score.
Although a goodwill letter for student loans isn’t guaranteed to fix your credit, writing one is worth a shot. At worst, your loan servicer will reject your request. But at best, your servicer will ask the credit bureaus to remove those late payments from your record.
So what exactly is a student loan goodwill letter, and how can it lead to late payment adjustments? Here’s what you need to know, along with a sample of a goodwill letter for student loans that you can use as a template.
What is a student loan goodwill letter?
As its name suggests, a goodwill letter is a letter you write to your loan servicer requesting it remove late or missed student loan payments from your credit report in an act of goodwill. Late payments can seriously drag down your credit score, and they’re a red flag to other lenders that you don’t pay your debts on time.
So if you have late payments on your credit report, you could get slapped with high rates on a mortgage, car loan, personal loan or line of credit — or not even qualify in the first place. But if your goodwill letter is successful, your lender might remove those negative marks on your credit report. In that case, you’ll see your credit score improve right away.
Unfortunately, there’s no guarantee that a student loan goodwill letter will work. The decision is completely up to the lender, who might not care about the circumstances that led to your missed payment.
But then again, you might get a sympathetic reader, especially if your late payment was due to unexpected circumstances, such as an illness or a sudden job loss. If you can explain what happened in a polite and appreciative tone, your lender might be receptive to your request.
Make sure to word your letter carefully and explain what got you into this financial mess in the first place. Own up to your mistakes and assure your lender that missing a payment (or payments) was a rare occurrence for you that won’t happen again.
If, on the other hand, the reported late payment was an error on the part of your loan servicer, you can dispute it directly with the credit bureaus online or via phone or email. By contrast, a goodwill letter for student loans is your best bet if you made the mistake but want the chance to explain yourself and hopefully get another shot.
Sample goodwill letter for student loans
While everyone’s goodwill letter will (and should) look different, this sample will give you an idea of what yours could look like. Remember to keep an appreciative tone while clearly stating your request.
To whom it may concern,
Thank you for taking the time to read my letter. My name is Anita Favor, and my account number is 123456789. After checking my credit report, I discovered a late payment was reported on May 5, 2018.
I’ve always had a great experience with your company, and I’m committed to paying back my loan on time. Unfortunately, I experienced a sudden job loss during that time that stretched my budget to the point of breaking. I was unable to keep up with payments, which is a very unusual occurrence for me.
As you can see in my record, I’ve always made payments on time except for this one. Paying back my loan on time is important to me, and I resumed on-time repayment immediately when I was able to secure a new job and get my finances back on track.
At this point, I’m trying to obtain a mortgage and am worried about qualifying or getting stuck with high rates, which could cost me thousands of dollars over the years. I truly believe my credit report doesn’t accurately reflect my creditworthiness or my dedication to paying back my debts.
I humbly request that you make a goodwill adjustment and remove the late payment. Thank you for your consideration, and I hope you approve my request.
Provide important documentation with your letter
Once you’ve found the perfect way to word your late payment adjustment request, make sure you’ve included all the necessary information:
- Your name, phone number, address and email
- Your account number
- Statements proving that you generally pay on time (if applicable)
Provide all identifying information so your loan servicer knows exactly what loan and late payment you’re referring to so that — if they’re so inclined — they can easily make the late payment adjustment for your student loan.
Track down the address of your loan servicer
Even though everything’s online these days, experts still recommend sending an actual letter to your servicer. To do so, you’ll need to find their address.
To save you some time, here are a few addresses for the biggest federal loan servicers:
For federal student loans:
Navient – U.S. Department of Education Loan Servicing
P.O. Box 4450
Portland, OR 97208-4450
Navient – U.S. Department of Education Loan Servicing
P.O. Box 9635
Wilkes-Barre, PA 18773-9635
For private student loans:
P.O. Box 9640
Wilkes-Barre, PA 18773-9640
P.O. Box 3229
Wilmington, DE 19804-0229
P.O. Box 82561
Lincoln, NE 68501-2561
P.O. Box 7860
Madison, WI 53707-7860
CornerStone Education Loan Services
P.O. Box 145122
Salt Lake City, UT
FedLoan Servicing Credit
P.O. Box 60610
Harrisburg, PA 17106-0610
633 Spirit Drive
Chesterfield, MO 63005-1243
You can expect to get a response within two to three weeks. If you don’t hear anything by then, follow up with a phone call.
Take other steps to build your credit
Although there’s no guarantee a student loan goodwill letter will work, writing one is worth a try. If the servicer takes back that late payment report, your credit score could increase significantly.
But if it doesn’t, you’ll have to take the slow and steady route of rebuilding your credit in other ways. Keep paying back your loans on time, and do your best to chip away at your debt.
“Amounts owed” make up about one-third of your credit score, so lowering your debts will increase your score. You should also be careful not to close any old accounts, as “length of credit history” also plays a role.
As you know, falling behind on student loan payments can be a hard slap to your credit rating, so try your best to pay them on time. If you’re struggling to keep up with bills, contact your loan servicer about adjusting your payments.
You might be able to put your federal student loans on income-driven repayment or adjust payments through refinancing. You can also explore your options for deferment or forbearance until you can get back on your feet.
By contacting your loan servicer before you miss a payment, you might be able to reach an agreement and avoid damaging your credit.
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1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of June 23, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.18% effective July 10, 2020.