In 2016, SBA 504 Loans was launched as a student loan relief program.
SBA’s mission is to help people with limited financial resources pay their loans through a collection of loan modifications, consolidation and forbearance programs.
For a variety of reasons, some borrowers are unable to pay their debts.
The SBA 502 Loan Modification Program (LLP) helps those borrowers pay off their student loans.
A SBA lender can offer a borrower a loan modification if they can prove they can afford the new loan and the loan is serviced in good standing.
This can help borrowers make payments on their loan while keeping up with their monthly payments.
To qualify, borrowers must have an income of less than $45,000.
A borrower can apply for a loan with a modified monthly payment of $100 or less, but the borrower must be enrolled in school.
The loan modification is only available for borrowers with loans issued between February 15, 2020, and June 30, 2020.
To apply for the loan modification, borrowers may use a credit card or bank account.
For the first year, SBB 504 Loan Modifications can offer an annual payment of up to $1,000, but a second-year loan modification may be available for up to a $2,000 payment.
Loan modification fees vary based on the loan amount.
For example, if the loan was issued in 2017, the first-year fee is $2.25, but if the borrower pays $2 in a lump sum, the fee will increase to $3.25.
SBB 502 Loan Consolidation and Refinance Program (LCRP) helps borrowers consolidate their student loan debt.
Loan consolidation means a borrower can refinance their student debt with the same lender, which may help reduce the interest rate they pay on their debt.
LCRP is only for borrowers who have a total outstanding loan balance of $5,000 or less.
Loan Consolidations and Refinances can only be done at a private lender and only for the first time after the borrower is released from the SBA loan modification program.
If you are a student with a loan that is in default, you should contact your school to learn if your loan can be refinance.
You can find out more about the SBB 501 Loan Consolidate Program by clicking here.
The other SBA programs that can help you pay your student loans include SBA 501 Loan Credit Card, SBC 501 Loan Card, and SBA 403 Loan.