![]() The late payments and default status will stay on your credit history for 7 years.ĭifficulty in refinancing: Default can make it harder for you to refinance your loans, making it harder to lower your interest rate or change your repayment plan.Ĭollection calls and letters: Lenders may hire collection agencies or sell your loans to debt collectors to collect your debt, and this can result in calls and letters from collectors. Some of the potential consequences include:ĭamage to credit score: Lenders tell the credit reporting agencies you defaulted, which can have a negative impact on your FICO credit score and make it more difficult for you to qualify for future credit, such as car loans, mortgages, credit cards, and even rental agreements. If your loans are listed there, then they are federal student loans.ĭefaulting on private student loans can have serious consequences. To determine your loan type, visit the Federal Student Aid website,, and check the loan information provided there. These loans don’t qualify for the Covid-related forbearance options available for federally-held student loans, but they may be eligible for other federal benefits such as loan consolidation, income-driven repayment plans, and loan forgiveness. ![]() Student loan servicers, such as Navient, American Education Services, and Nelnet, service a type of loan known as Perkins Loans and Federal Family Education Loans, which are owned by private lenders and guarantee agencies. If you have private student loans with Navient, American Education Services, or Nelnet, make sure you have a private student loan and not a privately-held federal student loan. Related: How to Get Student Loans Out of Default Watch out for privately-held federal loans Until your loans are in default, you may still have eligibility for unused deferment, forbearance time, and interest rate reduction payment plans that return your account to good standing and help lower your monthly payment. Many private lenders consider loans delinquent until more than three months have passed since the last required payment was made. Defaulting on a loan means you have not made the required payments on time. ![]() Yes, it’s possible to default on private student loans. ![]()
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