Defaulting on a student loan can have serious consequences for borrowers. It is important to understand the potential outcomes of defaulting on a loan in order to make informed decisions about repayment. One common misconception is that defaulting on a student loan will not affect a borrower’s credit score. However, this is not true. Defaulting on a student loan can have a significant negative impact on a borrower’s credit score, making it difficult to obtain future loans or credit cards.
Another misconception is that defaulting on a student loan will not result in legal action. In reality, lenders have the option to take legal action against borrowers who default on their loans. This can include wage garnishment, where a portion of a borrower’s wages are withheld to repay the loan, or even the possibility of a lawsuit. It is important for borrowers to be aware of their rights and responsibilities when it comes to student loan repayment to avoid these potential legal consequences.
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