Student loans a continued default is not good news for the person paying them, they can definitely be sent to a debt collector and bury you with their own fees on your balance. It’s possible to get federal loans out of default, but that’s not always the case with private student loans. People who default on student loans do so because they are not repaying their debt as previously agreed upon. This forces the lender to get their money back in other possible ways. Not having or going into default on your student loans can have a big impact on your personal finances. Our advice is to avoid getting to that point in the first place.
The most significant impact on defaulting on student loans or sending them into default is a direct hit to your credit. These types of consequences can also include losing access to other types of federal financial aid and even garnishing your wages. Another thing that can happen is that your tax return gets withheld and collection companies charge you these incredibly high fees. But don’t despair, there is a way to rebuild your credit if you default on your student loans.
How can I get my loan back if I default on my student loans?
More consequences for defaulting on your student loans can be based on the type of loans you have—federal or private. With federal loans, they aren’t considered in default until you’ve gone nine months or more without paying them. However, private loans will remain in default if you have gone three months or more without paying them. There are options such as student loan rehabilitation, student loan consolidation, refinancing, and hiring a counselor to help you navigate this difficult situation. After that, rebuilding your credit won’t be easy, but it’s definitely possible.