I know that you hate to pick up the phone and on the other end of the line find a bill collector. But one thing you do not want to avoid is Student Loan collections.
Having your Student Loan to go into collections is by far one of the worst things that could result in damaging your credit dramatically. There are ways to prevent default.
First you need to know that your student loan can not be cleared through bankruptcy. It is with you for life, through thick and then the ups and the bad. You have to pay it! So don’t go to school thinking you can skip on this note.
If you are facing rough times there are many deferments you may qualify to receive to postpone your payments. Then if you don’t qualify for a deferment, ask for a forbearance. Having a forbearance allows you to temporarily postpone or reduce your loan payments. You are responsible to pay the interest that accrues during the forbearance period. Unpaid interest may be capitalized which is interest added to your loan principal. Then the capitalized interest will increase the amount you owe, and may result in a higher monthly payment after the forbearance period has ended.
If you are behind, contact your lender immediately. If your loan goes into default you may be:
- Unable to obtain federal student loans in the future
- Be assessed up to 22% in collection cost
- Have up to 15% of our wages garnished
- Have you income tax refunds withheld
- Damage your credit rating
- Be contacted by a collection agency
- Be unable to obtain loans in the future to purchase a car or home.
These matters can easily be avoided if you contact your lender right away. Remember if you are experiencing financial hardship there is a way out and help is out there. You can not solve the problem with avoiding it. Reach out to your lender to see if you qualify for a deferment or forbearance to postpone your monthly payments.
Peace, Love, & STILLETOS!!!
TaWana
Source:
Student Debt Imaged Retrived November 21, 2009 from: http://students.ou.edu/H/Kasey.L.Hahn-1/StudentDebt.gif
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