There Is Student Loan Help Available If You Need It
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Even after you have chosen a loan plan that seems to fit your needs, you may find it difficult to keep up with when it comes time to start making payments, but luckily there is student loan help available.
The best option available is to apply for a deferment, but to be approved you have to meet certain conditions. A deferment means that you are excused from paying your loan for a set period of time, and with some loans you can defer both the principle and interest payments. However, you can only defer payments if you can prove that you are unable to make your payments due to unemployment or other financial difficulties, or that you are going back to school.
If those conditions are not the case, you can apply for a forebearance. They are easier to get as they allow for more reasons, like personal problems, illness or simple inability to pay. The difference is that with a forebearance, your interest will always accrue, but if you are stuck, you can get one for up to a year.
Whatever you do, don't default on student loans. Defaulting means missing payments for 270 days, and it can have serious side effects to your credit score and will end up accruing tons of interest and penalties, making your original loan unbearable.
You will also no longer be in repayment mode, owing monthly payments, but you will owe your entire loan amount immediately so it will go to a collections agency. If you go into default and are employed, often the government will use wage garnishment to get their money, which is contacting the employer and taking an automatic portion of your salary, otherwise there are federal rehabilitation programs that can help you get out of defeault and revers the negative impacts it has on your credit.
Student loans refinancing is another option you have if you are trying to make your payments more manageable and avoid default. Refinancing your loan is basically negotiating a new interest rate or perhaps a longer repayment term. Ideally you want to hope for a lower interest rate, although it is highly dependent on your credit score, especially with private student loans, so if it is not possible, at least extending the duration of the loan lowers your monthly obligation.
If you have more than 1 loan though, consolidating them is a better solution as you will combine them into one monthly payment, usually for an overall lower interest rate. You should do your private and federal student loans separately though, as your federal loans are subject to much lower interest rates and more flexibile deferment options, and you will lose those benefits if you consolidate them with private student loans.
If you are now facing paying back your costly student loan, look into your options before considering defaulting. There are ways to lower your monthly balance, or even take a break from paying for a while, so exhaust your resources and get student loan help. The repercussions of just not paying are too high, and you will then find yourself paying for your
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