Students who are enrolled in colleges through a student loans program and are about to graduate, maybe worried about their loans. Given the high interest rates, and lack of well-paying jobs in the market, they fear they may not have the money to pay off their student loans, and wonder what would happen after that. Here’s a list of things that can happen.
Lowers your credit score:
There is a concept of credit score in the loan business, that is marked on the basis of how well you are in paying off your debts. Those students who do not have money to pay back their student loans, may have their score lowered, and may not be able to take more loans in the future.
This would be especially problematic because if you cannot take any more debt, you cannot start a business, and jobs are usually not high-paying enough for you to be able to pay off your debts. This in turn creates a strange conundrum.
Government may Garnish you:
In case of federal loans, the government may seize off your money legally from your wages, tax refunds, and even disability benefits. That means you get less than what is expected of them, as a part of that goes to the government. You may also be charged with further penalties.
You may get sued:
Government and private debtors have sued a lot of people in the past for defaulting or not paying back their student debts, numbers which go up in the 1000’s. What’s worse is that in most cases they win, which can potentially force you onto the streets.
There are also instances of private debtors being a scam or fraud that cost debt holders a great amount of distress and pain. They are a lot in number and usually very hard to identify because of their efficient methods of scamming.
Interest constantly increases:
High interest rate causes your debt to grow, which may grow faster than you can pay it off. For instance, there is a known case in which student debt of a student was about $40,000 at the time of her graduation. She kept paying the debt for about a decade, only to have her loan increased to $48,000. It gets worse if you do not have any money at all to pay back.
Get your student loans consolidated:
If you are wondering “If I should consolidate my student loan?”, it is a good option. However, make sure when getting your student loans consolidated, properly do the calculations and cross check with others, to ensure getting your student loans consolidated may not harm you in the long run.
What happens when I consolidate my student loan?
All your loans roll under one payment with a fixed interest rate, which makes things easier for you. So yes, if the calculations go in your favor, you can confidently say “I will consolidate my student loan.”
Final Thoughts: If you have any questions or confusions about student loans and how you can consolidate your student loan, you can get the best answer from our website or contact us directly by clicking here.
