Education is the part and parcel of life and to maintain a bright and prosperous future, you need to educate yourself. Who does not want to get educated? Although education is getting expensive day by day, most of the students and parents are applying for educational loans and sometimes they fail to pay off their educational loans at the right time and thus earn a bad credit score. Student’s loan default is a common phenomenon and it is like an ignominy on your career when you become bankrupt and become unable to pay off your student loans.news
What results from student’s loan default?
When a person fails to pay off his educational loans at the right time, he gets harassed in a very bad manner. This is called debt harassment. The debt collectors or his money lenders call him whenever they feel like and they might even call at the middle of the night. When you become a defaulter, the collection agency keeps harassing you. However, at this moment you should take help from the US department of education and ask for student loan help.
You even fail to get any kind of financial assistance as the financial institutions stop giving out further loans like house loans or car loans. You also cannot use your credit cards as well. Wage garnishment is another negative consequence of defaulted student loans. Your wages get garnished by 15% and you get lesser salary.
How to tackle defaulted loans?
Contact your loan lender – This is the first thing you should do when you fail to pay off your student loans in the right time. You should contact the person who gave out private student loans to you and ask for student loan help. You can ask for loan deferment and the collection agency might defer your payment date and might reduce your monthly instalment.
Loan consolidation -If a student takes numerous educational loans, he might consolidate his loans and merge it into one. Thus you can pay off your loans by making a single payment.
Opt for a wise mortgage plan – if you choose a wise equity release plan, you can even pay off your educational loans with great ease as you can get the money in monthly instalments or in lump sum amount. There are various Equity release interest rates that are of great help to you. The wise plans include home reversion plans, lifetime mortgage and even a withdrawing life time mortgage plan.