Consolidating student loans after default
A student loan borrower is considered to be delinquent the day after she misses a scheduled loan payment.
As long as the borrower makes the payment as soon as she can or contacts her loan servicer to discuss her options, a delinquency will not necessarily hurt her standing or finances.
According to Time, 8 million borrowers (or 1 out of 6) are in default on their federal student loans.
But you have options if you default — and there are precautions you can take to stop it from happening in the first place.
If your student loans are in default, the stress of dealing with collections agents, possible wage garnishment, and tax offsets can be enough to make you want to bury your head in the sand.
But your situation can only get worse if you are not proactive and explore the options available to you.
Firstly, it will negatively impact your credit which will making trying to borrow money very difficult in your future.
It essentially means that the borrower is late on a payment, but has not fallen into default on their loans yet.