Student loans are a stress that many Americans have to take on in their lifetimes, and the fear of defaulting on those loans is always looming overhead. However, what exactly happens if you do default on them?
Defaulting is a much more serious offense than a late payment; defaulting occurs when a borrower hasn’t made a payment in nine months or longer. Not only will this negatively affect your credit score, but the federal government is also usually able to take your money before you even receive it to repay your debt.
If you happen to default on your loans, it definitely isn’t the end of the world, but it’s something that you’ll spend quite a bit of time trying to remedy.
Image via CNN Money.