Many students think that defaulting on a student loan after graduation is a smart way to get rid of a debt.
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After all, they no longer need the money for school and in fact need the money for settling into a job and new home.
However, defaulting on a student loan is a terrible mistake in almost all cases, because it affects your credit rating very negatively.
If you have student loans, it is important that you start repaying them on schedule and that you repay them on time.
Doing so will actually improve your credit score.
If you are having trouble repaying your student and college loans, speak to the lenders rather than ignoring the problem.
Most lenders will actually give you a six month grace period after graduation so that you can find a job and settle into post-college life before repaying your loans.
If you have several loans, your lenders may be willing to help you pool them into one larger loan payment that requires smaller monthly payments.
Some lenders will also give a few months grace in case of unemployment.
Read your loan agreements carefully to find out what your student loans are like and what is forgiven in them.
If you need to, work out a different payment schedule, seek out refinancing, or find some other way to repay.
Only default on your student loans as a last resort when you really have no way of repaying your debts.
In that finality, be prepared for the decision to affect your credit score quote badly for some time.
Once you default on one loan, it really counts against your credit rating - especially since as a new graduate you do not have a long credit history yet.
After all, lenders who see that you have defaulted on one financial responsibility will wonder why you wouldn’t default on their loan, as well.
After defaulting on your student loan, you may be unable to get credit for some time and you will have to work much, much harder to re-establish good credit.
