4 Steps You Must Take Before Defaulting On Your Student Loan
Student loan default is a huge mistake. Defaulting on your obligation to make timely payments on your student loans will destroy your credit score and cripple your financial future. Your ability to borrow money in the future to purchase a car, buy a home, even land the job of your dreams, could be denied for years if you default on your student loan. A low credit score means you will pay more for credit when you do get it. But it doesn’t have to be the end of the world. But you do now have four options.
To improve your credit rating and rehabilitate your student loan — and restore your credit history with the passage of time and timely bill payments — you should take a combination of any or all of the following steps BEFORE you default on your student loans:
1. Pay off your student loan in full. You may need to borrow from a relative or a close friend, or sell assets to raise the money to pay off the student loan balance plus accrused interest and fees. Maybe you can sell off your car. Maybe take a large income tax return or inheritance and pay off the loan. Whatever it takes. By having this type of defaulted college debt hanging over your head, you will constantly be hounded by collection agents and subject to garnishment of your wages and future tax returns. If you can’t pay off your defaulted student loan, then consider…
2. Consolidate your loan — Turn to the FFEL loan consolidation program to get student loan consolidation assistance. If you can’t consolidate, then try to…
3. Rehabilitate your defaulted student loan — Learn more about the federal government’s own loan rehabilitation program.
4. Request deferment on your student loan — You must not be in default to receive a deferment. Check out our free guide describing how the student loan deferment process works.
Finally, although it is a long shot, you might want to look into loan cancellation. Student loans can be forgiven under a variety of circumstances.
For the Federal Student Aid website, featuring qualification and program guidelines, click here…..
Or visit FindHow2.com for their free guide on how to get student loans forgiven
To sum it all up for you: College lasts four years. Don’t let your college student loans seem to last forever with a default. No matter what your opinion on student loan ethical behavior by lenders, your student loan is a debt you can’t hide from. Pay off your student loans, consolidate your student loans, defer your student loans or rehabilitate your student loans… but please don’t default on your student loans! Consult with your lender to learn more about the four above or other options available to you that suit your own unique circumstance. Four words to remember: Avoid student loan default!