How To Get Out Of Student Loan Default
When you miss a payment for your student loan, you risk getting into student loan default. It’s important to adhere to the repayment agreement you made when applying for your student loan. Failure to do so may make your loan get into default. A default student loan is one of the worst things that can happen to you. The effects are costly and the consequences are not small. Here are some of the effects of a default student loan.
There are many more effects of defaulting on your loan and it is imperative to make sure you don’t find yourself in the situation. The process is not easy but it’s better than facing the consequences.
1. Loan Rehabilitation
For loan rehabilitation, you can contact a loan holder and negotiate an affordable monthly payment that you can be made 20 days prior to the due date. The process is long and may include having your tax return withheld but in the end, the record for your default loan is completely removed. Although the late payments can still reflect on your credit history, you’re in the clear.
2. Loan Consolidation
Consolidating your loan is another way to fix a default student loan. With this method, your loan is paid back, together with interests and it is replaced with a new repayment plan, low interest and payable over a stipulated length of time. Once you consolidate your loan, your debt is no longer in default and you can access federal programs again and benefit from the student aid and other programs.
3. Repay Your Loan
The last option is to repay your whole loan. If you have the money, you can fix your default loan by simply paying it off. This method is not always ideal for people as funds are not always available. In the first place, if you had the money, you wouldn’t be in this situation. Choose an option that works for you and get out of this stressful situation as fast as possible.
Loan consolidation might be the best option as it helps you pay off your student loans and cancels your default loan leaving you with better terms. Contact us today for debt consolidation services.