Consolidating student loans and default

A late payment will start affecting your credit score after it’s 90 days late, but the most serious consequences hit when your loan goes into default.

For most federal student loans, that happens when you’re 270 days late on a payment.

And depending on the type of loans you have, creditors can take some of your wages, withhold your tax refund or take you to court to collect the debt you owe.

If you’re this deep into a private student loan default, it’s best to contact a lawyer who specializes in student loans.The loan holder could be your lender, a collections agency or the lender’s insurance company.If you’re proactive about communicating with your lender, many private lenders will help you catch up on payments by temporarily lowering your monthly payment or allowing you to go into deferment or forbearance.But if you continue to stay behind on your payments — especially without talking to your lender — expect calls from a debt collector.The Consumer Financial Protection Bureau has sample letters that you can use when responding to bill collectors.

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