With prices of everything rising, education too has taken a hit on this account. It is now a struggle getting through college and even those that have been fortunate enough to have obtained student loans; keeping up with repaying the loans has become a major concern. Regardless of the fact that you have obtained a good college education, well paying jobs are hard to find in the present scenario and so paying back loans has become a lot more difficult today.
Defaulted Student Loan – Nine Consecutive Missed Payments
Given these adverse financial conditions, many students are affected by defaulted student loans which mean that unless they fix their finances fast finding a loan in future will become a major hurdle. Defaulted student loan is any loan for which the borrower has not paid up for nine consecutive months. Once you are deemed to have defaulted on your student loan your debt will be passed on to a third-party collection agency and you will also be penalized with fines that are quite severe.
Defaulted student loans are scary situations since the defaulter will already be short of funds and with the addition of penalties and fees their financial situation will take an even bigger hit. In fact, the lending agency is entitled by law to garnish whatever wages you are earning and even your income tax returns will be held up till such time as you clear up your debts. The worse thing that will happen is that future loans will become almost impossible to find.
It is therefore recommended that you take certain steps in order to prevent becoming victim of a defaulted student loan. For one, you will need to look at the possibility of requesting forbearance period in case your financial position deteriorates severely. The forbearance period can last for three hundred and sixty-five days or less and it can be renewed to a maximum of three years.
You can also ask for deferment of your student loan which means you will temporarily be allowed to stop paying your loans, though not in the case that your loan is a subsidized one. You will need to, at the very least, also have to look for some tips in regard to defaulted student loan help. Only by understanding how to avoid defaulted student loans can you realistically expect to remain afloat in regard to paying back your student loan.
The plain truth is that not every defaulter will qualify for assistance and so it is necessary that you do your best to find out how to avoid defaulted student loan, rather than look for solutions once the horse has bolted the stable.