Student Loan Delinquency and How to Avoid it

Coins dropped into the fountain.

Flickr user 19melissa68

Once your college days are over and you have that first post-graduate job, it feels great to be able to be your own person financially and pay for things when you need or want them. One of the negative aspects of this, however, comes in the form of looming student loan delinquency. You signed that promissory note stating that you would pay that loan back, in full, plus interest.

Here are some tips to avoid not only delinquency, but defaulting on your student loans.

Set Up An Auto-Pay Reminder On Your Phone Or On A Calendar

You may have begun to do this prior to graduating, but sometimes even the best of us forget to pay. If it happens, don’t sweat it. Just call the loan provider as soon as you realize your mistake, and make that payment as soon as possible.

When setting up auto-payments, it is a good idea to send the check or auto-drafted payment out at least three days before the due date to ensure that the money is credited to your account on time.

Set Up Automatic Payments Through the Lender’s Web Site or Through Your Bank’s Web Site

Automatic payment is fast and convenient, and helps you not only make your payment on time, but helps save you money in the long run. The money is automatically scheduled to be transferred from your bank account on the date you set up with the loan provider. That way you never need to worry about whether the payment was made on time.

Ask About More Affordable Payments Or Other Payment Options

If you never ask for help, you’ll never receive it. One of the best ways to avoid delinquency and keep your loan (and credit) in good standing is to call and request different payment options. Some loan providers will work with you to set up a different due date, set up a lower payment option, or allow you a few months of forbearance to help you get back on track

Forbearance Can Be Helpful

Forbearance allows you to stop making payments for a limited amount of time, usually anywhere from three months to a year, to help you get enough money saved to begin making payments in a timely manner again. This keeps your loan from going into default, and it helps you get time to save money to begin repayment once the forbearance period has ended.

Ask For Assistance Before Things Get Serious

Sometimes money emergencies happen, and sometimes these emergencies can affect your ability to pay down on your student loans. We can’t stress this point enough—if you need help, call your loan provider and ask. Many student loan providers are willing to work with people to help them pay down their debt, help them navigate forbearance paperwork, or give them alternate payment options to get them back on track.

Student debt is a part of life for many Americans. It doesn’t have to crush you though.  Ask for help when you need it and you will be financially sound. Call your lending institution as soon as you need help to avoid defaulting on your student loans.

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