In the United States, the defaulting on a student loan is usually described in which the former student or borrower has not made any payments on his student loan for at least 270 days for privately funded student loans, and 270 to 360 days federally funded student loans. There are serious consequences for the borrower if he defaults on his student loan regardless if it is a private student loan or a federal student loan.
Take note that defaulting on a student loan would result in long-term consequences such as the record of your defaulted student loan appearing in your credit history for the up to seven years even after the defaulted loan is paid in full. Therefore, if you are a student planning to apply for a private or federal student loan, or already a current borrower for a student loan, you should know the general steps or guidelines on how to avoid in defaulting on your planned or current student loan. Knowing how to prevent in defaulting on a student loan would spare you from the serious consequences that you would experience.
The basic steps for avoiding a student loan default:
ñ You should understand the options and responsibilities under the proposed loan agreement or contract. Read and understand the specific terms and conditions of the loan contract.
ñ Borrow only the amount that you need for your educational expenses. A borrower would usually have a grade period of six months after graduation before the first loan repayment starts so you should take into account the possible income you would earn when you get a job.
ñ Keep all the documents and other records of your student loan. You should make copies of the loan contract, checks, and other written records related to the loan. Make your repayments on time especially if you have a job with a regular income so you could set aside a part of your monthly income as loan repayments.
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