How Can Defaulted Student Loan Stain Your Credit Record?

By Author: Nancy Crippen
Total Articles: 22
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The competition in the academic as well as professional arena is increasing rampantly on a continuous basis. As a result, the career aspirants try to enrol for the most effective courses offered by the well-known institutions and universities. A reputed academic institution means expensive courses and huge expenditure means credit amount. The aspirants belonging to elite class can easily get admitted to these programs, but the students who belong to middle class, it becomes difficult for them to enrol for these courses due to lack of resources. This, in turn, compels them to take up huge finances that are difficult for them to repay. As a result, they get caught in the defaulted student loan issues.

In the time of recession, the students took up loans, but hardly get any relevant job to start with. This led to the delay of their repayments and thereby involving them into the defaulted student loan matters. No employment, no money and no money means no repayment. Expense for pursuing quality education has become experienced such a hike that it is now tough for the learners of middle class families to pursue education ...
... on their available funds. They are compelled to take up finance on credit from different institutions, which sometimes, become difficult for them to repay. Common is the problem of increasing study expense and so is significant the issues of defaulted student loan.

Defaulted student loans can affect you in many ways. Some of the consequences are as follows:
- In spite of the creditor, a collection agency will be delivered the duty of collecting the payments, in case you default on student loan.
- All the costs, direct or indirect. Associated with the collection of the instalments, including the costs related to courts and attorney fees would be payable by you.
- The creditor can litigateyou in a lawsuit to get back the entire debt amount at once.
- Wage garnishment is another main consequence of the defaulted student loan cases.
- Interception of federal and state income tax refunds can also be one of the effects of defaulted student loan.
- A particular percentage of your Social Security benefit may be denied by the federal government.
- The credit record will remain stained for about 7 years after you repay the default amount. In short, the defaulted student loan issue will not only hamper your present, but ruin your future finance opportunities as well.
- Until you pay back the entire amount or plan an arrangement to repay at regular intervals, you will remain devoid of the financing services of the institutions.
- No repayment, no deferments.
- The most significant consequence of defaulting on student loan will be the withholding of the subsidized interest benefits.
- Renewal of any of your professional license would be restrained if you are on the list of borrowers engaged in defaulted student loan issues.
- If you are planning to join the Armed Forces, you won’t be allowed to do so if your credit record is unclean because of defaulted student loan stains.

If you want to avoid being trapped in any such impact due to your defaulted student loan stains, there are many ways of being prevented, but the most relevant would be to consult the lenders and find out the benefits of defaulted student loan help, which is concerned with consolidating the debt at a central point to make repayment easier for the borrowers.