FACT: 1 out of 6 student loan borrowers is currently in default! Shocking yes. More importantly, why? Expensive housing costs, low paying jobs, and unattainable payments are causing many student borrowers to file for a forbearance – or, dare we say it… a DEFAULT to find relief.
However, what many borrowers don’t know is the dreadful consequences that could follow because of defaulted student loans. This blog is meant to help you avoid a default disaster with tips and alternatives to save you from a future of potential financial hardships.
A default could ruin your credit.
Good credit is crucial for anyone looking to rent an apartment, buy a house, finance a car, or even start a business. A default could show up on your credit report for up to 7 years and may prevent you from qualifying for the things you want. If you have bad credit (default or not), companies like ScoreShuttle may able to help. Their software can help you enhance your credit to reach a score you can be proud of.
Debt collectors won’t back down.
Family loss, hourly cut backs at work and costly bills can all contribute to forgotten or missed payments. No matter what the cause, creditors don’t care and are unlikely to back down. In fact, they may call several times a day, send multiple letters or could even visit you in person to demand payment.
Possible wage garnishments.
Eventually, debt collectors will do just about anything to get paid. For those with federal student loans, this could include garnishing your wages or potentially intercepting a portion of your tax return. Yikes!
Here’s what you can do.
If your student loan payments are too high to meet, whatever you do, DO NOT DEFAULT! Instead, try enrolling in an income-driven repayment plan to see if you qualify for a LOWER payment. Income-driven plans take into consideration how much you’re currently making and adjust your monthly fee accordingly. If fact, monthly payments can be as low as $0 per month for qualified borrowers. If you or someone you know is at the edge of entering into a default, click the button below or call Docupop at (866) 269-5501 to see if you qualify for a lower monthly payment.