Paying for Student Loans can become a real problem if you are not on time with all your payments, there are penalties that you get if you keep falling behind on schedule. But people who take out student loans often don't do their research in order to see what these penalties can be. Don't worry, we got you covered and after reading this, you will know for sure what you will have to endure if you fall behind on your student loan payments. It is very important that you keep your payments up to date because doing so will not only help you settle your debt faster. Doing this will also keep your score credit high in order for you to get more benefits in different areas.
Missing on your student loan payments will rack up both penalties and fees, this will inevitably make your debt far more expensive than it already was. Also, the most important part is that your credit score will take a massive hit. If you plan on getting out other loans, paying for cars or getting a credit for a house, you will want to keep up to date with your student loan payments. Also, the United States government is well within their right to garnish your wages, tax refund, and even take away your Social Security benefits. At first glance this may seem unfair but there is a reason these payments need to keep taking place on all borrowers.
How does the punishment differ between federal and private loans?
Not paying for Federal Student loans will get you charged a 6% late fee of the amount you were going to pay when the delay is 30 days late. If this delay is 90 days, you will get reported to the credit bureaus as delinquent. After 270 days with no payment, your loans go into default. With private student loans, not paying has different consequences than with Federal Student Loans. You will get charged late fees and your debt might get sold to collections. You will see damage on your credit score and the lender can even take you to court. If this lender's lawsuit is successful, they may even get permission to garnish your wages.
