What happens if you fail to repay your educational loan?
Question by troubled: What happens if you fail to repay your educational loan?
What happens if a person fails to repay his educational loan? What are the consequences?
Best answer:
Answer by Common Sense
If it’s a Federal loan they can seize your tax refunds. Other lenders could sue you and get a court order to attach your wages.
Add your own answer in the comments!
They take the degree back. Just kidding ,they will go after your taxes and any other money they find you may have. You should pay them something even if it’s just the min due. save your self a lot of hassle.
Your wages will be garnished and income tax refunds will be seized until it is paid off. You cannot hide from education loans. Those loans WILL be repaid by you one way or another.
If you fail to replay your loan, IRS will take your tax refunds. In addition, this will go on your credit report, and remain there for 7 years. This means that it will be difficult for you to get loans, and IF you can get a loan the interest rates will be very high.
A collection agency could try to get a court order to garnish your wages, but that is rare.