But what if the grace period is over and you still can’t afford it? What if you missed a lot of due dates? Six months? A year? Many bad things can happen to you. The worst part is you get kicked out of your house. But there is also good news. You can fix this.
However, the process can be difficult. You may have to make sacrifices, but it will be worth it in the long run. So if you’re on a student loan, barely surviving, and desperately trying to get out of the situation, this guide is for you. Let’s start with the consequences of not paying student loans.
Account goes into default status
The number of accounts going into default state is high. How high? According to Pew researchof the 43 million in America, one million student loans end up in default status. But what is the default status? It is the 270 day promissory note period (may vary) during which no loan is paid. After this term, the lender can bring a case against you. So it is better to use this period to find ways pay your student loans.
Credit score affected
The credit score decreases with irregular bill payments. Likewise, irregular loan payments affect your credit score. It is crucial because student loans are one of the first loans you take out. You wouldn’t want to start with a bad credit score.
Job Rejection
Most companies check the person’s profile before hiring, including their credit profile. So if your credit score is bad, you could be rejected. Remember, that’s not why you took out the loan in the first place.
How to avoid the consequences of not paying a student loan?
Not paying student debt is scary. So get out of this situation quickly. Fortunately, it’s not the end. You can pay off your student debt by following these smart tips.
1. Talk to your lender
Contact the lender and ask if you can get a little more time. Or negotiate the interest amount. Try to get to the lowest monthly installment so you can afford it. Keep in mind that negotiating with the lender is not possible with federal loans due to their strict rules. However with private loansyou can not only talk to the lender but also nurture the relationship for future help.
2. Get a second job
Perhaps your current job income is so low that you can barely afford basic necessities. Then you have two options: find a better paying job or find a side job. When you start your career, it can be difficult to find a well-paying job, which means that many are left with the second option. Find a part-time job and manage some time to work. This is a great way to earn extra money that you can only set aside for loan payments.
3. Reduce unwanted expenses
This one can be difficult, but at least try to reduce unwanted expenses until you neutralize the situation. Set a budget for yourself for essential expenses. Discipline yourself and don’t exceed the limit. For example, set aside $100 per month for groceries. You can also save on things you don’t need urgently. For example, buy new clothes every other month.
Final thoughts
Not being able to pay your student debt is now so common that you can ignore it once, but not the consequences. So you will have to take action to pay it quickly. On the bright side, these things will turn you into a better person who will appreciate little things in life. And of course you paid your student debt.