Your lender reports on your student loan account to a national credit bureau
on every month. If you allow your account to go past due, it could cause a creditor
to deny your credit application.
Lower Finance Charges
When you remain past due, you stretch out your repayment schedule. Because
Federal Family Education Loan Program (FFELP) lenders charge interest on a daily
accrual method, this increases your overall cost of borrowing. When you make payments
every 30 days, as opposed to every 40 days, less of your payment goes to interest,
more goes to principal, and your loan gets paid off sooner.
Avoid Collection Efforts
When you stay current on your loan, we don’t have to bug you. Neither does
your lender, your school, or anyone else who is interested in seeing you get current.
Most lenders now offer interest rate discounts to borrowers who make their
payments consistently on-time. These may include discounts for arranging to make
payments through automatic deductions from your checking account.
It’s The Right Thing To Do
If you’re like most borrowers, your student loan is the first loan you made.
Your dependable repayment of the loan allows your lender and your guarantor to make
loans to other deserving students. Besides, regular repayment of your loan will
help you feel good about the way you manage your credit!