Disadvantages of consolidating student loans
In many cases, private lenders have similar rules regarding deferment eligibility.
If you are afraid of missing payments on a private loan, your first step should be to inquire about deferment.
You may be contacted by your lender or servicer, but they will not usually report you to one of the 3 major credit bureaus at that point, so your credit report and credit score will still be safe.
If you become more than 60 days late on your payment, the lender will probably be contacting you to find out why you haven’t paid and they will try to convince you to pay at least part of the amount you owe.
Other programs to be aware of are the Public Service Loan Forgiveness Program and the Direct Consolidation Loan Program.
Sometimes you simply can’t pay and have not been granted a period of deferment or forbearance.
But meanwhile interest charges will continue and will be added to your principal balance.
However, despite the fact that forbearance will not save you from continued interest charges, it can still be a lifesaver if you can’t meet your minimum payments.
There are some great programs for people who cannot afford their monthly payments.
Even if your score was not good to begin with, a delinquent account can still take many points off your score – a scenario you always want to avoid if possible.
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