I have heard of loan balances becoming unreasonably high if a person defaults on their loan. How unfair can these situations get?
I'm still going to school so I haven't even entered repayment period, but I'm reading things in my master promissory note about defaulting and it has me wondering what a default situation could look like. They say they make the entire amount due all at once. If you can't afford minimum payments, how on Earth would you be able to pay the entire thing? They say they send your loan to a collection agency. Will the collection agency send your repayment balance skyrocketing to the stars? The example I'm imagining is a $60,000 loan becoming a $300,000 loan within a few years. Yikes!
I'm still going to school so I haven't even entered repayment period, but I'm reading things in my master promissory note about defaulting and it has me wondering what a default situation could look like. They say they make the entire amount due all at once. If you can't afford minimum payments, how on Earth would you be able to pay the entire thing? They say they send your loan to a collection agency. Will the collection agency send your repayment balance skyrocketing to the stars? The example I'm imagining is a $60,000 loan becoming a $300,000 loan within a few years. Yikes!