The statute of limitations for private student loans is decided at the state level, meaning you may reach the point where your lender can no longer take legal action to recover the loan amount. However, the debt may be sent to a debt collection company.
Keep in mind that the loan will stay on your credit report for seven years from the first delinquency date, which may create problems in other areas of your life.
1. Late fees
If you’re 30 days late on federal student loans, you’ll typically encounter a late fee of up to 6% of the amount that was due and unpaid. So if you owed a late payment of $350, you might have to pay up to $21 extra on top of your existing student loan payment.
Private student loans have similar late fees but aren’t standardized.Continue reading