Many students will apply for and receive a loan to cover the cost of their schooling when they go into college. One thing they may not consider is the effect bankruptcy and student loans have on their credit rating. Bankruptcy can keep someone from receiving desired financial help. With the right assistance, students can supplement their financial aid with scholarships or grants so that they can still reach their career goal.
When students apply for financial aid, they must supply their tax information. If their bankruptcy has been discharged, they should not have to worry too much. When it is discharged, creditors know that the credit has been cleaned up and students will have more cash to pay back the loan. This is frequently why car salesmen will offer a credit line to people after it is discharged.
There are several types of bankruptcy. People have a choice of paying off all the bills over time with payments or having all their debt eliminated at one time. Both forms are effective and will help the student’s credit over time. A loan that is already established on the student’s credit cannot be eliminated if it is a federal loan. Some private ones also do not qualify for dismissal.
A federal loan can be acquired with the help of a school financial counselor. They will assist in filing for the loan and will ensure that the money will go where it needs to. Students should not be left wondering how much they owe or if they even owe anything at all. Most loan companies will work with the student to make sure they can pay it back at a comfortable rate.
Payments can be deferred if necessary. Students sometimes go through financial crises that require an extension on their loan. To save their credit and to be open to receiving funds in the future, they will want to try to keep up the payments as much as possible.
Students can discuss bankruptcy and student loans with their academic and financial counselors, who will guide them through the processes. Questions about either topic that a school financial counselor cannot answer can be looked up online.