Missed a Student Loan Payment? This is What Could Happen

Missed a Student Loan Payment

You lose your eligibility for future federal student aid, as well as for debt reduction plans like deferment or forbearance if you fall behind on your federal student loans. The worst part is that your full loan debt is due right now.

Acceleration is what it’s called, and it may put a lot of strain on your finances. Further harming your credit score is the credit agencies’ reporting of the default. Your income or your tax refund might be withheld if you are unable to make payments.

Private student loan default will probably result in collections. Additionally, your lender may sue you in an effort to recover expenses. Your credit score and potential loan eligibility might be seriously harmed by this.

Making on-time payments on all of your student loan obligations is the greatest strategy to prevent default. Here are some methods to prevent your student loan payments from becoming missed:

You may avoid forgetting your student loan due date by enrolling in autopay. With automated payments, you’ll never miss a student loan payment as long as you have enough money in your bank account to cover it on the day it processes.

Look into deferment or forbearance options

Make sure to immediately advise your loan servicer if your contact information changes. By doing this, your service provider’s crucial updates and payment information won’t slip your mind.

Your student loan payments may be temporarily suspended through deferment and forbearance programs, but these options vary based on whether you have federal or private student loans.

Federal student loans: If you have federal student loans that are eligible, interest may not continue to accrue while you are in deferral. Your loans continue to accrue interest during forbearance.

Private student loans: The lender may provide choices for deferment and forbearance. For instance, Sallie Mae and Ascent both offer forbearance and deferral plans.

Your previous student loans are repaid in full when you refinance them. You may have lower monthly payments in the end, which will make it simpler for you to keep up with them if you are eligible for a reduced interest rate or decide to prolong your repayment period.