What are the consequences of defaulting on student loans?

Falling behind on student loan payments or defaulting on student loans can have serious implications in South Carolina. The consequences of defaulting on student loans can include: 1) Your loan will receive a higher interest rate. When you default on student loans, your credit score will decrease, and your loan’s interest rate will increase. This means that you will owe more money in the long run, increasing your overall loan debt. 2) Your wages and/or tax refund may be garnished. The government or the loan servicer may request your employer to withhold a portion of your wages to make up for your missed payments. Alternatively, they may also garnish your tax return until the loan is fully paid off. 3) You could be denied future loans. Defaulting on student loans will show up on your credit report and will stay there for seven years. This could make it difficult for you to get approved for future loans, such as a mortgage or car loan. 4) Your loan may be sent to collections. If you fall behind on your student loan payments for a long period of time, the debt may be sold to a collection agency or to the government. The collection agencies will try to collect on the debt, which may include harassing phone calls. Overall, it is important to remain current on student loan payments in order to avoid the negative consequences of defaulting. If you are unable to make payments, speak to your loan servicer to see if you are eligible for a loan modification or other repayment options.

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What are the consequences of defaulting on student loans?

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