Your credit can take a hit if lenders put you in default to the major credit bureaus. In order to recover the money owed, they could do many things.
The typical threshold for entering default on a private student loan is three missed payments in a row (90 days). Bankruptcy, previous loan defaults, or death can also cause a private student loan to go into default.
A private lender may use their own collection efforts or retain the services of a collection agency to pursue payment. Furthermore, legal action may be taken against you.
If you’re concerned about defaulting on your private loans, it’s a good idea to read your contracts thoroughly to learn your rights.
Read: 5 Essential Tips for Effectively Managing Your Student Loans
It is imperative that you get in touch with your servicer without delay if you have not received a letter indicating that you are in default, doing so will allow you to explore repayment options and ascertain whether or not default may be prevented.
Talk to your private student loan provider or servicer right away if you’re worried about missing payments. Establishing a repayment plan or settling your debt may be within your lender’s negotiating parameters.
