How to Catch Up on Student Loans
Falling behind on your student loan payments can trigger credit and financial problems. Your lender will likely charge additional interest; once the default hits your credit report, your score can drop and prevent other loans, such as mortgages and auto loans. Thankfully, help is available to graduates who need assistance with catching up on student loan payments.
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Instructions
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Take advantage of hardship options to get out of loan default. Being aware of financial problems may sway lenders to offer a loan deferment or forbearance. Both options stop payments on the account. Interest doesn't accrue with deferment, whereas lenders do charge monthly interest on accounts in forbearance. The lender determines whether borrowers qualify for deferment or forbearance based on their situation. Lenders increase the loan term to compensate for skipped payments.
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Request a lower monthly payment to help you catch up on payments. If you can't afford the present payment, notify your student loan lender and ask for a temporary reduction. The lender may only require interest payments on the account and then gradually increase payments to include both principal and interest.
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Speak with your lender about adding extra money to your monthly payments. For example, if you missed six student loan payments, divide your payment by six and then increase future payments by this amount until you catch up. This way, you stay on track with the original payoff plan.
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Get out of default with payments that reflect a percentage of your income. Rather than decide a monthly payment based on how much you owe, your lender can review your financial situation and then base payments on your income. Speak with your lender to see if the company offers income-sensitive payment plans.
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