![]() ![]() Consider using a consolidation loan to combine all of your educational loans into one big loan.If you are having trouble making payments due to a more permanent income deficit, your lender may be able to suggest alternate repayment options, such as extended repayment, graduated repayment, income sensitive repayment, income contingent repayment and income-based repayment.Ask your lender about these options while you are still making payments, before you default on your loan. ![]() If you encounter temporary financial difficulties, consider applying for a deferment or forbearance on your loans.Notify your lender or servicer promptly of any changes that may affect the repayment of your loan, such as change of address, graduation or termination of studies, leaves of absence and transfers to another school.Prepare a checklist of all your loans, including the name and phone number of the lender, the type of loan, the amount of the loan, the interest rate, and especially any due dates or deadlines.Make sure you understand your options and responsibilities before taking out a loan.If your total debt will be more than twice your expected starting salary, you are borrowing too much and should consider attending a less expensive college. Default rates increase with overborrowing. You may be prohibited from enlisting in the Armed Forces.Īnd of course, you will still owe the full amount of your loan.You may not be able to renew a professional license you hold.Subsidized interest benefits will be denied.You will also be ineligible for assistance under most federal benefit programs. You won’t receive any more federal financial aid until you repay the loan in full or make arrangements to repay what you already owe and make at least six consecutive, on-time, monthly payments.Your defaulted loans will appear on your credit history for up to 7 years after the default claim is paid, making it difficult for you to obtain an auto loan, mortgage, or even credit cards.The federal government may withhold part of your Social Security benefit payments.Your federal and state income tax refunds may be intercepted.You can be sued for the entire amount of your loan.You’ll be liable for the costs associated with collecting your loan, including court costs and attorney fees.Your loans may be turned over to a collection agency. ![]()
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