The percentage of people who are getting behind and defaulting on the repayments of their student loans has been steadily increasing over recent years. It can be very difficult when you finally graduate and find that you owe thousands of dollars in student loan debt and the job that you have isn’t paying quite enough to cover all your living expenses and the payments required on your loan.
Many students get into difficulty paying back their loans and they begin their working career with bad credit due to defaulting on their loan. You don’t want this to happen and you will need to factor into your budget the repayments of the loan.
While payment is due once you graduate or stop with your education there is often a grace period of 6 to 9 months after that date, depending on the type of loan that you have. The first thing you will need to do if you are having problems paying is to determine what type of loan you have and what options are available to you.
This grace period will give you time to find a job to help make the payments.
With some loans you will begin to make interest payments immediately whereas others will allow you to pay the interest over the term of the repayments or at the end of the repayment of the actual loan.
This is why it is important for you to find out what type of loan you have and what options are available to you to help with your financial planning and make sure that you don’t default on the loan repayments.
If you do default on the loan there are various consequences that you need to be aware of. The full amount of the debt could be called up for repayment in total or it could be turned over to a debt collection agency.
You could incur additional late fees and collection fees and your credit history will be damaged.
There are many more areas that will impact on your life so it is wise to work through any issue with your lending advisor and do so with the assistance of the budget that you will have already prepared. They might be able to arrange a consolidation of debt that you help you pay off your loans at a lower interest rate thereby reducing your overall payments that need to be made each month.