Failure to make proper payments and/or failure to meet the conditions of a student loan can have a catastrophic outcome. An individual can face financial and even legal issues when evasion of a student loan payment occurs. Learn the scary truth and consequences of these actions.
Financial and Legal Issues
It is paramount for the current and/or former student to understand the severity of these actions. Avoiding or evading a student loan payment is no laughing matter. Student loans carry a great responsibility, and avoiding payment can cost a person more than just money. The individual needs to be informed and understand that repercussions of loan default can have a lasting effect on their future. Being scarred with financial and legal troubles can wound a person for life.
Here are a few repercussions caused by loan default:
- The student becomes automatically ineligible for any loan grace period or payment options. Once a default is made the situation is no longer negotiable.
- An individual’s credit becomes crippled. The person will now face difficulties buying a vehicle, property, or getting a credit card or loan in the future.
- The loan provider can demand immediate payment which can result in a formal lawsuit against the individual in question.
- As a result of loan default, the person’s overall credit score can suffer greatly.
- The individual can be forced to have money removed form their work paycheck in order to pay off the debt that is allocated.
- Due to these severe actions, the guarantor can take any or all state or federal tax refunds and apply them to the student loan debt. Any outside money winnings can also be taken away and applied to the debt in question.
- The individual in question can be sued by the guarantor. In this case the person may also be responsible for legal fees by the guarantor.
- In the most catastrophic situation, the guarantor may take legal action on a federal level. This action would involve the federal government taking the person in question to federal court.
Student Loan Payment Options
There are numerous options and outlets which will allow an individual to pay their student loan without facing these horrific situations. Do the proper research, and find the best and most effective ways to avoid a financial and legal catastrophe. Loan counselors can provide the individual simple yet effective ways to pay their student loans. Depending on the person’s unique situation, loan consolidation is also an option. Don’t pay a life long penalty because of student loan debt.