Nowadays, borrowing loans have become common. Be it for business purposes or educational needs, loans might be required at any point of time. But the most crucial factor that borrowers must keep in mind is the repayment of their concerned loan in time. It has been found that students mostly fail to repay loans that are borrowed for continuing education. Often, adversity in families compel many to opt for loans. Now, the banks act as one of the ideal institutions for lending financial assistance. However, they prefer to stick to their own patented laws and actions that are applicable for loan defaulters. Therefore, a student has to keep in mind that if he somehow fails to pay back his loan in time, it will be categorized as a defaulted student loan and hence he might be subject to serious legal actions.
Now, there are certain conditions that categorize a normal loan as a defaulted student loan. A student loan is considered a defaulted one when it exceeds the maximum period of 270 days from your application date. The declaration of a defaulted student loan is in fact a nightmare for it can lead one to a sea of losses. Once the lending institution discovers that you have not been able to repay the loan within the given period, they will be compelled to take necessary legal actions. For instance, your entire balance will be outstanding and banks will seize every facility provided to the students. You will be debarred from applying further loans and finally lose eligibility for forbearance and quick loans. Further, your transcripts might be withheld and the tax refunds will be intercepted. Moreover, your credit report might get affected and lastly, your bank accounts will be blocked.
Now, it's obvious that your following step will be to free yourself of your defaulted student loan status. There are several steps for it. Firstly, get a payment plan from your lender depending upon your income; consolidate all your defaulted loans; show anyhow that you run with a low income and you have not been able to repay the loan. Lastly, you can file a suit on bankruptcy. If you face any other complications, you can always get in touch with an online agent for advice.