Seriously Delinquent Student Loans Are Becoming A Serious Issue

Filed in Credit, Debt, Student Loans by on December 16, 2014 0 Comments

Data from the Federal Reserve Bank shows a not so good trend in new seriously delinquent student loans. While delinquencies of other loan types are in decline, student loan delinquencies are on the rise.

 

Uh oh! Student loan delinquencies are increasing.

Uh oh! Student loan delinquencies are increasing.

 

A serious delinquency is defined as a loan account being 90 days or more past due. This is the point at which lenders report you to the three major credit bureaus – after which you can expect your credit score to take a nose dive.

A crap credit score means you’ll have trouble getting a loan for a car or house, or even a credit card. Damaged credit can also make it difficult to get a mobile phone plan or rent an apartment. In short, damaged credit sucks.

After serious delinquency, if you do nothing, comes default (270 days without a payment). Then it REALLY gets ugly. Collections. Wage garnishment. Potential legal action. It’ll be like having to wear a sweater vest every day for the rest of your life.

If you’re behind on your student loan payments, contact the lender/servicer ASAP! Explain your situation and ask what options are available to you (see this other brilliant post on the importance of talking to your creditors).

Your creditors don’t want you to default either. They want their money, after all. You might be able to defer payments until you catch up or make some other arrangement. If you don’t ask, you don’t get.

Be a good friend and share this with your peeps. Given the above graphic, you could very well know someone with a seriously delinquent student loan.

 

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About the Author ()

Melvin is the Smart Green Pig. "Smart" as in intelligent. Some would say "Super Intelligent" or perhaps "Genius". But also "Smart" as in surly and sarcastic, so watch your Ps and Qs! By the way, Melvin gets paid (quite handsomely) by SECU, so even though he's completely unbiased, some might think otherwise. Just sayin' (disclosin').

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