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Saturday, February 28, 2009

Don't Default On Your Student Loans

By Michael Fleischner

Paying back your student loans is a must. If you don't pay back your student loans, the consequences are immense. Before taking out your loans, keep in mind that paying them back is your responsibility.

Going to college costs money. This is simply the reality of higher education. Whether you are taking an online course or getting your degree at a traditional university, going to school is not free. Going to college usually costs more than most can afford which forces eager individuals to take out student loans. Keep in mind that no matter what type of loans you get, you must pay them back.

What happens if you don't pay back your loans? Loan defaults continue to rise in today's economy and the impact is very negative for those individuals who cannot or choose not to repay them. Financial difficulties, employment problems, and relationship issues can all result

When you don't pay your loans the impact is rather significant. First and foremost your credit score will be impacted. This information can stay on your credit report for up to five years making it difficult to acquire future loans, credit cards, and so on. Any business you deal with uses a credit score to determine your ability to pay them.

Bad credit not only has negative consequences for your financial well being, but your personal relationships as well. When you are struggling financially, relationships are strained and difficulties persist. When creditors come calling, tensions run high. Do your best to ensure that you are not in this situation. It can start a chain of events that negatively impacts your personal well being and that of your most important relationships.

Once you've defaulted, getting your credit score back up takes time. When individuals start making on time payments again, they think they are out of the woods. However, it takes a long time for your credit score to be made whole again so its best to never fall behind on your loan payments or at least address it immediately when it happens.

Student loans are rarely forgiven by financial institutions or government agencies. If you are struggling to make your monthly payments for any reason, immediately contact your lender to work out a positive resolution to the problem. Often individuals wait until it is too late to improve the situation and regret it afterwards.

The good news is that you can work with your lender to restructure your loan payments. There are a variety of repayment options your lender can employ to help you through difficult times. Remember that they want to get paid so they have a vested interest in working with you towards a successful outcome. Again, don't wait until it is too late to do anything. You are better off admitting that you are having repayment problems versus ignoring your bill and hoping it will go away.

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