Paying back student loans can be difficult, especially if you are a recent grad who has failed to find a job, or if you have been laid off recently. If you are having trouble making your student loan payments, you need to make certain to take all precautions and steps to avoid student loan default.
If you are having difficulties making your monthly student loan payments, you should contact your student loan lender immediately and make them aware of your situation. Your student loan lender will be able to advise you on any and all options you may have to postpone your student loan payments or apply for a different student loan repayment plan depending on what type of student loans you have. Below are 5 reasons why you do not want to let your student loans slip into default:
1. The entire student loan amount becomes due in full.
2. Collection costs up to 19.5 %, and could be added to your student loan.
3. The defaulted student loan will appear on your credit report for up to seven years.
4. Your employer could be served a legal garnishment notice requiring them to forward 15% of your pay towards repayment of your student loan.
5. Your income tax refunds could be withheld and applied toward your loan repayment.