How to address your defaulted student loan!
Have you defaulted your student loans, or have you missed quite a few payments, or are your payments late? If so, you could have defaulted your student loan. Very soon youâ€™ll start receiving irritating phone calls at home and at work.
You are responsible for repaying the student loans you took to study even if you had to leave school, had difficulty finding a good job after graduation, or just did not pass out of your college. If you do not make payments on your student loans for 270 days and have not made particular arrangements with your lender for a deferment or forbearance, you are in a defaulted student loan. Defaulting on your student loans has serious consequences.
Defaulting on your student loan!
The important thing to remember while defaulting on any education loans is that although you can get rid of their student debt, defaulting ruins your credit history. It can make it impossible for you to apply for a home loan, credit card and a mortgage or any other type of credit. The IRS can refuse to give income tax refunds until repayment of the loan. A student who has default student loans can even land up with their wages being automatically deducted until the loan is out of default. Try to negotiate with your lender and the government to find a way to pay back education loans
Default should only be considered in unexpected circumstances and defaulting on student loans cannot be considered for bankruptcy.
How to avoid default?
1. The best way to avoid default is to limit the amount of money you are going to borrow. Even if this means that you have to skip a term or two of college in order to work and earn the money necessary for schooling rather than have a loan of it, this is much better choice rather than going into debt that you cannot repay.
2. If you find yourself in a hard financial situation with your student loan, start by getting in touch with your lender and clearing up the situation. Often arrangements such as a deferment or forbearance can be made to help you pay back the loan on different terms.
3. Another option to keep you qualified for aid is consolidating defaulted student loans.
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Consequences of defaulting on your student loan!
1. No more financial aid of any type.
2. The entire student loan becomes instantly due in full, very bad!
3. Collection costs of retrieval agencies up to 19.5 % are added to your student loan.
4. The defaulted loan appears on your credit report for up to seven years.
5. Your employer could be served a legal notice requiring them to deduct and forward 15% of your pay towards the government for repayment of your loan.
6. You could be sued for repayment.
7. The federal government may refuse to give part of your Social Security benefit payments
8. Your income tax refunds could be suspended and applied toward your loan repayment
9. You’ll be disqualified from deferments.
10. Federal interest benefits will be deprived.
11. You may not be able to renew any professional licenses until the loan is paid.
And after all this you still have to pay back that defaulted student loan! Itâ€™s not really worth the hassle! Pay on time or negotiate forbearance or a deferment but donâ€™t ever default!