Millions of Americans have taken out student loans.
They are great for securing yourself an education, but they come at a cost:
They can be difficult to pay back, especially if you are struggling to find work in your field.
You may have one already, or you may be considering taking one out, so here is some stuff we think you should know.
In most respects, failure to pay back your student loans will affect your credit in the same way as defaulting on a credit card debt, but there are a few key differences to be aware of.
The first is delinquency.
When payment is 90 days overdue, you receive delinquent status, which is reported to all three major credit bureaus and will negatively impact your credit score.
Consequently, you may be declined new credit cards, declined by landlords for a new apartment, or even denied the service contract you're looking for from a cell phone provider.
If this weren’t frightful enough…
After 270 days of not paying off your debt, your account proceeds to ‘in default’ status.
Your account is then transferred to creditors at a collection agency…
And we know what these people do:
Everything within their legal limits to make sure you repay.
If after this you still don't work to diminish your debts, the federal government may garnish your paycheck.
So before deciding whether that student loan is worth it, we encourage you to strongly consider the likelihood that you’ll be able to pay it back in full.
If you need to speak with a professional about your situation, do not hesitate to reach out :)
