Repay Student Loans

Written by Mark Sanfilippo
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Repaying student loans is a serious obligation. These loans are just as real as a house mortgage or a car loan. Most student loans don't require any sort of payment while you're in school, and most have a "grace period" that starts after you stop attending school. Grace periods are usually six to nine months at the most.

After your grace period, which, by the way, doesn't apply to Parent PLUS loans, you have to make your monthly student loan payments. Many people aren't quite clear about what could possibly happen if you don't make your payments. If you choose to not make your student loan payments, you risk going into what is referred to as default. Default is definitely not a good thing.

Going into default can cause a number of bad things to happen to you and your credit rating. First, the lending company can (and probably will) notify the Credit Bureau and your default status will greatly reduce your credit rating, thus making it very difficult to get another loan. You can also eventually have your loan payments taken out of your tax returns and even your monthly wages. If it gets bad enough, the lenders can actually sue you for the money and any penalties which have accrued.

Don't Let It Get This Bad

There's really no reason to let your student loans go into default. There are a number of programs out there that will allow you to consolidate you loans and thus lengthen you loan repayment period. Consolidation can also help to reduce your monthly payments so that you won't have to worry about going into default. Lenders don't want you to go into default anymore than you want to go into default, and most would rather work with you to help you find a repayment schedule that fits your particular situation.

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