Typically the promissory note will discuss payment due dates, interest rates, and remedies if the loans are not paid off as scheduled.
If the borrower stops making payments as agreed upon in the promissory note, the lender will put a default status on the loans after 270 days of non-payment.
These steps include getting out of default, paying your bills on time, paying off your debt, and eventually applying for credit as needed to improve your debt-to-credit ratio. Once you get started, however, you’ll see that in just a few months, your score will start to go up.
In order to repair your credit, you need to get out of student loan default first.
In many cases there can be consequences to being delinquent, which may include various fees, and having it noted on your account with collections agencies if the delinquency has lasted at least 90 days.
But there are differences between the two, and it’s important to understand which is the better option in your particular situation.
If you are behind a few months in your student loan payments, you are technically not in default.
But, once one payment is more than 270 days late, your loan is in default.
Consolidation is the process of obtaining a single new loan to pay off your existing loans.