Defaulted student loans can be devastating to your credit as well as your current budget. It is important that a student loan debt is taken very seriously; it can affect your wages and whether you are eligible for income tax refunds. Defaulting on your student loan is avoidable if you just do a few simple things. Initially, try to let the lender know what’s happening and avoid defaulting on your student loan. Admitting to your lending institution that you are facing financial difficulties usually stops the need to default.
It was a strange situation; one of my close friends even thought it was amusing because he had this vision about them the finance company trying to repossess my schooling. This attitude is often the main reason for defaulted student loans in the first place. To avoid defaulting on your loan, contact your lender before it gets to this stage.
After all the worry, getting a deferment was quite simple and painless. The company was very helpful and they assigned an agent to me who assisted me with the deferment process. Everything was arranged within the week, payments were frozen and I could start living my life again.
I had other obligations which would not be so readily dealt with so it was so helpful when my student loan provider was so accommodating. I wish all my creditors had been as helpful as the student loan provider. Paying more for your loan in the long term is a consequence of deferment because interest is still adding up while it is left unpaid. Despite this, it is still worth it because there isn’t a defaulted student loan. Often, lenders will accept occasional small lump sum payments. It is worth checking with you bank to see if they will agree to accept interest only payments on a loan for a temporary period.
Your credit rating should not be affected but remember the principle sum will still have to be paid at some stage. Some see these loans as a necessary evil because without them they have no chance of completing their education. New students may not be able to have a loan if the percentage of defaulters is too high. Your debt doesn’t have to be a burden that threatens to over whelm you if you just stay in contact with your lender.
Making voluntary arrangements with your lender can help avoid a defaulted student loan. It could also help perspective college pupils get the funds they need to finance higher education costs.
Author: Mary MasekoThis author has published 2 articles so far.