The word default has a negative connotation in student loans. This is a situation that everyone must avoid at all costs. With all the viable options around you, there is now way for you to end up with student loan default. Before you consider in applying for student loans, you are already aware of the repercussions of not being able to pay on time.
Take note that paying this loan is worth long years of financial commitment. When we say long years, it would actually range to 10 to 30 years. Knowing this, you have to be responsible enough on paying on time before the worst scenario happens.
Once you start making one or two payments, your student loan will lead to delinquent status. And if you miss more than 270 payments, your student loan will now be considered as default. Even if you still make partial payments your account is still under default status. This only shows that delinquent payment can lead you to serious situations. So what are the repercussions on having student loan default? There are actually many so you have to be careful on this one as it could adversely affect your life.
From the minor to serious repercussions, your life would definitely turn upside down due to your irresponsible student loan payment. If you lead to student loan default, you will be charged of late fees. Though this may sound simple, many borrowers are not fully aware that these late fees could even amount to more that the original money borrowed. Aside from this, collection efforts will also be charged.
You think that is enough? Student loan default can also prompt your interest rates to increase at every month that you fail to pay. This will instantly raise your balance a lot higher. Many are having troubles in keeping up with all their student loan’s monthly dues. This situation can be devastating as you would have a hard time budgeting for your family’s necessities and your student loan debts.
The long list of student default repercussion continues as the student loan company can sue you for your unpaid debt. If you receive any form of federal benefit, these companies can also intercept these benefits. And lastly, you can be denied of other future loans as your credit history is already tarnished. You many not be able to avail of mortgage if your record shows your delinquent payment. With all these negative situations, you have to remember that you can never get away your debts particularly your student loans.
If you are guilty of a student loan default, you can contact your loan manager and he will advise you of the most sensible way in order to get out of this situation. There are still many options in solving a default student loan status, this includes forbearance, loan cancellation and deferment. But if you don’t want to encounter all the hassles, you have to remember that your student loan is a debt you need to pay. So, paying all your monthly student loan dues is the best option.