Contingency Actions for Defaulted Federal Student Loans
- By: Rachel Fiona
There are a lot of factors that may cause for federal student loans to be defaulted, most of which involves you failing to meet the various loaning terms that you have agreed to. Most of the time, federal loans cause bad repercussions on the side of the borrower because different fees and charges will be placed on top of their missed payments. Fortunately, there are a lot of things that you can do to limit the bad consequences of defaulted federal student loans. Here are some measures that you may look into, if ever you find yourself in this sticky situation.
Since having your student loans defaulted will cause dark marks on your credit history and rating, you need to see to it that you carry out the necessary steps that will allow you to prevent this from happening. The first thing that you should do is to contact your principal lender and to make it known that you have no intention of running out on your obligations whatsoever. Be honest about the main reasons why you have failed to meet your payments, for they surely are nothing that your lender has not heard before. After doing so, try to suede your lender against placing the incident in your financial history by negotiating for new terms of payment that will benefit both sides.
Defaulted federal student loans can be very easy to deal with mainly because your lending agency would surely want to get its money back. With this said, it is more likely that he would be agreeing to the payment terms that you would propose, as long as it will not hurt him. For this reason, you need to be able to find the middle ground where your lender will get the payment that he deserves without you having to exhaust all possible means to come up with the money that you need for them. You can consult a third party, like an accountant for example, if you do not think that you can come up with these terms yourself. See to it that you come up with an agreement that you would be able to stick to, in order to avoid jeopardising your chances of rehabilitating your loan standing.
However, you should know that solely talking to the lending agencies that sponsored your defaulted federal student loans will not do the trick. Of course, you need to ensure that you make the payments that you agreed to on or before their deadlines, and that you work with the other terms of the new agreement that you have drawn up. You should also understand that it will take quite some time for your defaulted loan status to go back to its previous health. As a matter of fact, you would have to wait for at least 20 days after you make your ninth payment before you get your defaulted status revoked. Worry not, for as long as you pay your dues religiously, you should be able to get your former loan state back in no time.
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