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How Can Late Payments on Student Loans Affect You?

The exaggerations involved with one late payment on student loans could be imaginative, and for that matter, downright scary.  Yes, a late payment will affect certain aspects of the loan and your credit score, but it will not make or break a person.  Multiple late payments are an entirely different story, though.

Let’s look at the differences one late payment or multiple late payments can have on you.  Most lenders can understand one late payment.  Emergencies happen, and sometimes there just isn’t enough money in the budget that month to pay for the monthly student loan bill.  However, if this were to happen multiple times, or multiple times in a row, lenders may not be so understanding.

After one late payment, a federal student loan will become delinquent.  This will occur as soon as the day after the missed due date.  The loan will not be taken out of delinquent status until you either make a payment or file for deferment or forbearance.  The consequences of a loan becoming delinquent after one late payment will be as follows.  Typically, if you let those payments run late for another ninety days, the delinquency will be reported to the three major credit bureaus.  Your credit score will suffer because of it.  Late fees will also be added to your principal balance.  The rates for late fees differ per loan service, so it is important to call to get this information.

A loan default will occur after many late payments.  Specifically with federal student loans, a loan will be put into default status after 270 days of missed payments.  This is approximately nine months.  While it may seem like a long time, those months will fly by.  It is important to not let a loan default, as serious consequences could ensue, including wage garnishments or with holdings of federal and/or state tax refunds.

There are a few ways to ensure you’re not late on student loan payments.  For one, you could enact automatic bill pay for these monthly bills.  It is important to know, however, if your bank will push the payment through if there are not enough funds to cover the bill.  If your bank will allow this, then you won’t have to worry about being late on those student loans.  However, you will face an overdraft fee from the bank, so keep that in mind.

The best way to continue making payments on time or to defer the consequences of late payments is to call the loan servicer.  Keeping in touch with them and letting them know your circumstances can help you in making your monthly payments.  They’re not tyrants.  They’re working citizens, just like you and me.  So there’s no reason to be afraid of them.

What can you take from this article?  Don’t make late payments.  Even one could have consequences for you.  While drastic measures will certainly not be taken for one late payment, multiple late payments can have some serious penalties.


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