Student Debt: How to start paying it off

Date Posted: February 20, 2023
By: Maggie Marques

Student debt is something that should be taken seriously. One significant consequence is an uphill battle in obtaining credit and getting reasonable rates. Like other conventional loans, if you don’t pay, you will have a student loan default. This will negatively affect your credit history as it will stay on your credit report for the next seven years.

Possible consequences of student loan delinquency

When you go on default, whatever is left in your balance will be deemed due in full. Your lender will demand the total amount and even charge you a collection fee. Here are some of the possible repercussions:

  • Loss of tax refunds.
  • Difficulty in qualifying for credit cards
  • Higher interest on loans.
  • Approval of housing loans may be difficult.

When your Student loan debt becomes unmanageable, you may have difficulty continuing your education. You may be ineligible for further assistance regarding Federal student loans and other aid. Schools can even withhold your records and prevent you from getting your degree.

If you are struggling with your loan repayment, what should you do?

Repayment of your loans can’t be stressed enough, and paying on time all time is the goal. But what if, try as you might, it doesn’t happen? Here’s what you can do:

  • Talk to your loan servicers about a possible student debt consolidation.
  • Discuss alternative recourse such as deferment of loans.
  • Explore the possibility of student loan forgiveness and if you qualify.

It is understandable why it is challenging to repay student loans. The opportunities to repay are limited; you are still trying to find a solid ground to step on.

With a concrete plan and the proper execution, you’ll be debt-free. Once you understand the repercussions of not repaying your loans and desire to reduce your debts, financial freedom is within reach. Don’t hesitate to talk to a financial counselor and start paying off your student debt.

 

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