Monday, November 5, 2012

10 Tips to Help You Avoid Defaulting

Originally found in the October issue of the Metro Business College at Arnold's October Newsletter.

Default happens when you make no payments on your student loan for at least 270 days. By defaulting, you are violating your loan agreement and subject to several consequences including immediate payment in full of your loan.

Here are 10 tips to help you avoid defaulting:

1. Borrow for college expenses only. Borrow only the amount you need and only what you can expect to repay.

2. Understand your rights and responsibilities regarding your repayment obligation as well as your repayment options.

3. Keep all records of anything regarding your loan.

4. Notify your loan servicer if anything changes: address, phone number, your name, or if you change schools.

5. Seek help as early as possible if you have any difficulty with your student loan repayments.

6. If you have any questions, talk to your loan servicer. Things will get worse if you ignore them.

7. Keep credit card debt to a minimum or avoid credit card debt completely.

8. Create and maintain a budget.

9. Consider making nominal student loan payments while in school. This will reduce the amount you owe after graduation.

10. Make loan payments on time.

What might not seem like a lot of money right now, can make a big difference in your payment later.

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