Q: What are the consequences to defaulting on your student loans?
A: First, lets start by saying this is not a question you are going to want to find the answer to first hand. Defaulting on student loans is serious business, and something you are going to want to avoid at ALL costs. If you are having trouble repaying your student loans, please take a look at out Student Loan Debt Help section and contact your lender immediately.
The Consequences of Defaulting on Student Loans
1. No more new student loans or grants. You will be no longer eligible.
2. Your credit rating will be negatively impacted for 7 years of more. Since many things you purchase are based on your credit score, it will be nearly impossible for you to borrow money for a car, home, etc… If you are ever able to secure a loan or a credit card, your looking at some SERIOUSLY high interest, high enough to not even make it worth your while.
3. Since potential employers and rental agencies are legally entitled to your credit report, you may have problems renting an apartment or may be passed over for employment opportunities.
4. Collection agencies will become your new best friends, these guys are NOT going to leave you alone. They will call your place of work, your home, your parents, and other family members.
5. Since your lender WILL get their money back one way or another, it is quite possible that you will have your wages garnished and your tax returns/stimulus checks intercepted.
6. You will be held responsible for any court fees and other expenses associated with collecting your student loan repayments.
This is a basic overview of Student Loan Default. As always, you MUST check with your lender for your specific circumstances.
TheStudentLoanShark:
Answering all of your student loan and college financial aid questions. Read all of my posts by clicking here or ask me your student loan and/or college financial aid questions.
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