The downfall of the economy has gravely affected people all around the globe
. Individuals who apply for students loan to pay for college fees have full intention of paying back the loan on time but sometimes things do not go as planned. When a student is unable to pay off the loans on time, then it is called defaulted loans. This is one of the risks which every individual has to face when they apply for this loan. Another important factor which the borrower has to keep in mind is the delinquency period. This refers to the time period between delayed payments and the loan being declared as default. In this case these loans are referred to as delinquent student loan.
These loans also fall under the category of delinquent student loan when the borrower fails to make payment to the lender for 270 consecutive days. Some lenders may extend this period of time to 330 days if they have received irregular payments from the borrowers. If the borrowers fail to contact the lenders within this period of time, he will be declared as a defaulter. The borrower can contact the lender by using any reasonable means. Once the funds are declared as defaulted loans, it will be turned over to an agency who will be responsible to collect it.
The agency who is responsible to collect the delinquent student loan has every right to collect the loans by any means including legal processes. The borrower who fails to make the payments will be responsible to pay the court costs and other legal fees as well. In most cases, the court will give permission to these agencies to collect the defaulted loans from the borrower's income and future tax returns until the debt is settled. If you are declared as a defaulter then you will be reported to the Credit Bureau which may cause a lot of complications in your life.
Since the defaulted loans occupy a permanent place in your credit history, it can gravely affect your life. Some employees will not hire people who have a bad credit history. Also, in life, there is no surety there you will not face any financial problems. If you are declared as a defaulter then it will be very hard for you to find lenders who are willing to give you the funds. This can prevent you from purchasing a home or a car in the near future. Thus, falling under the category of delinquent student loan should be avoided at all cost by the borrowers.
If you are declared defaulter by the lenders then there are some vital points which you should keep in mind. The first thing which you should do is to contact your lender because they will be able to tell you your options. Once the funds are declared as defaulted loansthe only option left for the borrowers is to set up a reasonable plan in order to stop the lenders form taking further actions. You should follow the plan to the letter to pay up the delinquent student loanin order to avoid any complications.