Paying your student loans consistently and on time is extremely important. If you are having trouble making payments contact us immediately and we’ll help you work out a plan.
What is delinquent?
- If you don’t pay your loans on time they are considered delinquent.
- Your loan is delinquent even if you are only 1 day late on a payment.
- Even if you only miss one monthly payment and then start repaying your loan will remain in delinquency until you pay the past due amount or you change repayment plans.
- After 90 days of delinquency it is reported to the national credit bureaus and this will lower your credit score and have serious financial impacts.
What is default?
- After a period of time not paying your loan the delinquent loan goes into default.
- The period of time varies on the type of loan but many federal loans go into default after 270 days of delinquency (8 months)
Make no mistake, if you default on your student loans you can get into one of the worst financial situations ever. Default can haut you for your entire life.
Top 10 consequences of default:
- Defaulted student loans will destroy your credit for many years and make it difficult to establish good credit.
- You could have difficulty getting approved for a credit card, car loan or home mortgage.
- You may also have problems getting a cell phone plan, renting an apartment, or signing up for utilities.
- If you can get approved for additional credit you might be charged a higher interest rate than someone with good credit.
- Your income can be garnished.
- Part or all of your state and/or federal tax refund may be intercepted.
- You will lose eligibility for any additional federal student financial aid.
- Deferment and forbearance will no longer be available to you.
- You could be taken to court by your lender and be charged additional court costs, attorney’s fees and other collection fees.
- You may not qualify for certain jobs that require an employee background credit check.
What to do if your loan is in default?
If your loan is in default there are options to get out of default and avoid future consequences. The easiest way to get out of default is to pay off the loan in full but this is not an option for most people. Other options to get out of default are loan rehabilitation and consolidation.
Learn more about how to get out of default
Beware of Student Loan Default Scams
Unfortunately, many companies that offer student loan default relief are just trying to make money off people. You should never pay for help with a loan default, we will help you for free
Learn more about loan default scams