The collection power of the creditors is directly or indirectly dependent on whether you are subjected to loan delinquency or are a plain defaulter. Delinquency which starts soon after the debtor misses out on his first payment is often misread by the people. Some of the current day news read that a majority of debtors don’t even become defaulters despite of facing repayment difficulties.
As per experts the default and delinquency picture is only half defined and there are still many borrowers who are being incompletely informed on the same.
In fact if you go with the reports you would find defaults catching up the maximum limelight. Here take a look at the five facts you were unaware of:
Delinquency is less severe than defaults:
The real picture shows that despite borrowers finding themselves in deep financial troubles, they tend to make the monthly payment on a regular basis. The delinquent rate is higher than defaults.
Additionally, delinquency also has its share of results though not that severe. A delinquent record may get you in trouble when you try to secure a debt in the near future.
Fresh pass-outs from universities and colleges hardly become defaulters or delinquent with their payments:
So far, reports reveal that a majority of student borrowers despite of finding themselves amidst financial hardships actually tend to make their payments on time.
Loan delinquency reports focus on those who borrow even a meager amount of loan:
Sometimes, the troubles tend to double up for those who have had dropped out because of their incapability in availing a degree and thereby their failure in improving upon the financial flow.
Students hailing from low income backgrounds mainly borrow:
Despite of the Federal grants for students in operation, the chances for the piteous few to enroll for loans are higher.
This is because, the global economic melt-down have had its share on federal student grants as well, due to which the Federal budgets for low income students have eroded to a certain level. This has resulted in slashing grants for the community. Now, a larger number of students hailing from not-so-financially-stable backgrounds are compelled to borrow debts that promise to support their academic aspirations.
Not all borrowers are educated on the loan repayment options:
The Federal Government has issued a wide range of repayment procedures that deem to help financially struggling students to get out of the debt as soon as possible.
Though a large number of borrowers have to undergo counseling sessions where they are being taught on easy loan repayment options, still there are many who unofficially secure debts and thereby hear less or nothing about the repayment options.
The above mentioned facts are the ones you would like to know to get an insight to a delinquent student loan.