What happens if i defaulted on my private student loans

Make three full, on-time, consecutive monthly payments on the defaulted loan. Agree to repay your new loan under an income-driven repayment plan. Consolidation will not remove the default line from your credit report.

Ask your lender about possibilities for getting out of default. It may have options similar to federal loan default programs, or you may be able to negotiate another resolution to repay or agree to a student loan settlement for less than you owe. The private student loan market is especially complicated, so having someone who understands the system, your rights and your options is crucial.

Legit student loan help organizations won't call, text or email borrowers with offers of debt resolution. If it sounds too good to be true, it usually is. Here are some vetted student loan help resources to consider for information, advice or both; they are established organizations with verified histories:.

The Institute of Student Loan Advisors. Advice on repayment plans, forgiveness programs and dispute resolution. National Consumer Law Center. Comprehensive information on options for student loan borrowers.

Student Borrower Protection Center. Advocacy on behalf of all borrowers to influence policy. National Foundation for Credit Counseling. Complete financial review for struggling borrowers, which can include advice on student loan options and plans for dealing with other debt. American Consumer Credit Counseling.

Advice on repayment plans, help with paperwork and budget counseling. National Association of Consumer Advocates. Information for student loan borrowers and an attorney directory. Help for borrowers who have already filed bankruptcy that did not include their student loans.

Adam Minsky. Advice on defaults, dispute resolution, collections, debt settlement and legal remedies. Licensed in Massachusetts and New York. Stanley Tate.

Advice on debt settlement, bankruptcy, default and forgiveness. Licensed in Missouri and Illinois. Many of these organizations offer advice for free. Though federal and private student loans may have slightly different rules for what happens in default, student loan default has many consequences: Damaged credit: Before student loan default begins, you will already see damage to your credit report and credit score from missed payments.

Having your loan marked as in default will further harm your credit. Loan acceleration: At the same time, you could find your entire balance due immediately. Loss of hardship benefits: Loans in default lose the ability to use deferment or forbearance , popular methods to alleviate the pressure of pending loan payments.

When in default on federal student loans, you lose the ability to get additional federal student aid in the future. Garnishment: In some cases, your tax refunds, federal benefit payments, and wages can be withheld and used for payments. See: Statute of Limitations on Private Student Loans: State Guide How to get out of student loan default For federal student loans, you have three main ways to get out of student loan default: Loan rehabilitation: Rehabilitation requires a written agreement with your loan servicer.

Meet the Editors. What Is Loan Rehabilitation? You Might Be Able to Improve Your Credit With Rehabilitation If you rehabilitate your federal student loans, the lender will remove the default from your credit history though not your history of late payments. Other Potential Options for Getting Out of Default The process for getting out of default on private student loans is different than for federal loans.

Getting Help To find out more about available rehabilitation or repayment options for a private student loan, ask your lender and review your loan contract. Talk to a Lawyer Need a lawyer? Start here. Practice Area Please select Zip Code. How it Works Briefly tell us about your case Provide your contact information Choose attorneys to contact you. Dealing with Debt and Creditors. Dealing with Debt.

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Monitoring your credit score. Act fast by talking to your loan servicer immediately about how you can get back on track.