Household debt is at a historical high, and while analysts may not be too worried, you may be! Perhaps delinquencies and defaults have not yet reached the point where financial experts think the economy is headed down the tubes—especially since lenders are still more than willing to lend—but your own personal economy may be strained to the point of cracking. The numbers certainly sound staggering too, with a leap of over $400 billion last year in debt last year, bring the averages that households owe to over $13.5 trillion. While mortgages take up the largest chunk of most paychecks, student loans come in right behind them—even before auto loans or credit cards. That is significant and may cause you to wonder what life would be like if paying for education weren’t so cumbersome on your finances (in a very long-term way!).
If you have a private student loan, you may feel an even heavier burden, as the repayment choices are so limited. While federal student loans may be more limited in what they offer dollar-wise, they do offer much more flexible repayment plans; in fact, loans can be deferred, and in some cases even forgiven or canceled altogether. Unfortunately, private loan servicers can be quite aggressive in their collections activity once you begin falling behind on payments or become delinquent. You may feel extreme pressure to keep up with your payments so that your credit score is not affected, but if your income has been affected for another reason, your hands may be tied.
For many borrowers, an event like the loss of a job or a sickness means that there simply isn’t enough money to pay for most bills—much less a student loan or credit card debt. Months of putting money into the student loan when you did not really have the resources may have also finally pushed you over the edge, and even into considering filing for bankruptcy. And while your household budget may be strained, the rest of your life may be too, causing you to put off buying that new or nicer home or car, making plans, or opening the business you have dreamed about for so long.
Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan?
Household debt is at a historical high, and while analysts may not be too worried, you may be! Perhaps delinquencies and defaults have not yet reached the point where financial experts think the economy is headed down the tubes—especially since lenders are still more than willing to lend—but your own personal economy may be strained to the point of cracking. The numbers certainly sound staggering too, with a leap of over $400 billion last year in debt last year, bring the averages that households owe to over $13.5 trillion. While mortgages take up the largest chunk of most paychecks, student loans come in right behind them—even before auto loans or credit cards. That is significant and may cause you to wonder what life would be like if paying for education weren’t so cumbersome on your finances (in a very long-term way!).
If you have a private student loan, you may feel an even heavier burden, as the repayment choices are so limited. While federal student loans may be more limited in what they offer dollar-wise, they do offer much more flexible repayment plans; in fact, loans can be deferred, and in some cases even forgiven or canceled altogether. Unfortunately, private loan servicers can be quite aggressive in their collections activity once you begin falling behind on payments or become delinquent. You may feel extreme pressure to keep up with your payments so that your credit score is not affected, but if your income has been affected for another reason, your hands may be tied.
For many borrowers, an event like the loss of a job or a sickness means that there simply isn’t enough money to pay for most bills—much less a student loan or credit card debt. Months of putting money into the student loan when you did not really have the resources may have also finally pushed you over the edge, and even into considering filing for bankruptcy. And while your household budget may be strained, the rest of your life may be too, causing you to put off buying that new or nicer home or car, making plans, or opening the business you have dreamed about for so long.
Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan?