And will it affect any other open lines of credit I have, like interest rates, credit limits, etc? My student loan is just too much, I cant afford it, I dont know what to do, any advice would be appreciated?
2006-12-05 08:41:50 · 10 answers · asked by Anonymous in Business & Finance ➔ Credit
It will definately effect your credit negatively. What you need to do is get intensly focused on paying off your debt. Check out www.daveramsey.com. He wrote a book called the total money makeover. I recommend that you do to. I paid off 53K in less than 2 years using his plan.
2006-12-05 08:45:52 · answer #1 · answered by Ryan 2 · 1⤊ 0⤋
If you're really in a bind (and I mean REALLY) I would stop paying credit cards before student loans. Student loans are a type of secure loan, like a house payment. If you don't pay, not only will it affect your credit, but they can also garnish wages from your paycheck. Credit cards are not secure loans. That means, besides recking your credit, all they can do is harrass you with 50 million phone calls daily. I would try getting a low interest credit card and not charging anything else on that card until you've gotten your student loans under control. Try paying the interest on the loan plus $100 bucks each month. Also, set up automatic payment so you're never late paying your student loans. With some consolidation companies such as Great Lakes, automating your payment could decrease your interest.
Good luck.
2006-12-05 16:49:45 · answer #2 · answered by yasin04111 1 · 0⤊ 0⤋
See if you can get a deferment. As long as you are using your other lines of credit responsibly, you will not have a problem. The only snag you might run into is if you want to have your credit limit extended or if you want to get another line of credit from the same bank. When I had some serious money issues a long time ago, I defaulted on my student loans and a couple of my credit cards.
I was still in good standing with most of my other creditors so I went to one of them to get an additional line of credit. When they checked my credit report and saw the other problems, not only was I denied for the new line of credit but they also closed out my existing account. I think that I owed them about $40 but they were like, "Oh, that's OK. You don't have to pay it. We won't hold it against you. "
I guess they decided to proactively take the smaller loss to get rid of me rather than to keep the account open and risk being stiffed by $1000 in unpaid charges.
2006-12-05 16:53:52 · answer #3 · answered by Joe K 6 · 0⤊ 0⤋
Any type of loan default will affect your credit score for at least seven years if not longer. If its a government loan they can garnish your tax returns and wages. A better alternative is to contact your lender and explain the situation. They may be able to work with you as they would much rather see you pay it off than default.
2006-12-05 16:45:41 · answer #4 · answered by fancyname 6 · 0⤊ 0⤋
very badly. sometimes your current credit card companies will just raise your interest rate and/or lower your limit, any other loan you get will have a very high interest rate, and loans will be very hared to get.
before you default, call and talk to them about your problem and maybe they will help you figure it out.
they have specific loans to refinance and lower your monthly payments. you will pay more interest over the life of the loan, but on the other hand, if you find yourself in better financial position, you can pay it off early.
make sure you get a loan with no prepayment penalty.
2006-12-05 16:44:35 · answer #5 · answered by july 3 · 0⤊ 0⤋
Your credit score will go down the drain and it will not fall off after 7 years. Student loans are never wiped clean from your record.
2006-12-05 16:50:34 · answer #6 · answered by discokevin2001 2 · 0⤊ 0⤋
to not pay it will destroy your credit rating in turn raising all % rates and after time stopping you from getting any new credit.
not to mention, most student loans jack on a seriously high fee for late payments, etc. a friend of mine went from a 24,000 student loan....skipped paying on it for just 1 yr and now owes over 43,000 and its climbing faster than she can pay it off.
eat peanut butter and bread only, sleep on the floor, walk to work....before you do anything to your credit....cause if you destroy it.....you will be sleeping on the street.
nothing comes before credit....not even food.
2006-12-05 16:46:58 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Consolidate the loans if you can and get an extension on repayment.
2006-12-05 16:49:56 · answer #8 · answered by feudalsark 1 · 0⤊ 0⤋
Like anything else you default on.
2006-12-07 00:02:36 · answer #9 · answered by luciousgreeneyedlady 5 · 0⤊ 0⤋
dont do it .............. i will set you back a long time
2006-12-05 16:45:42 · answer #10 · answered by flavorlicious 2 · 0⤊ 0⤋