When you applied for a student loan, it is because you had a need for financial assistance for your education. Because of the high cost of education, it is oftentimes necessary that many students like you avail of many student loans at one time.
Such student loans are taken from the federal government, from your provincial or territorial government, from a financial institution, from a bank, or from other sources.
The interest and payment terms of these student loans vary but because they were applied for and the loan proceeds were received simultaneously or consecutively, you may be in a situation that come the time that payments are due, you will have difficulty in paying for them.
What to do when you fail to pay your loans
While this is a situation that you may not want to be in, the reality is there and you have to do something about it. In such cases, you should go to the lending institutions from whom you secured these student loans and in good faith, present to them your predicament.
The government has put in place repayment assistance measures specifically for such cases. They are designed to help make it easier to pay back your student loan.
The Repayment Assistance Plan
The government’s Repayment Assistance Plan (RAP) makes it is easier for student loan borrowers to manage their debt by paying back what they can reasonably afford.
While private financial institutions may be more stringent, the fact remains that your lenders cannot ignore your plea for consideration. They will of course initially try to collect from you but if this fails and you can prove to them that your current financial position is not conducive to such payments, they have no choice but to listen and remedial measures can be drawn up.
The loans can be restructured where the loan payment terms or period would be extended and the monthly dues can be reduced. Of course, this would mean more interests that need to be levied and paid by you. Interest rates may be changed from a fixed rate to one that is floating or changing from year to year.
No way should you let your student loans be delinquent or be at risk of default due to non-payment as this will adversely affect your credit rating. A poor credit rating can affect your ability to get loans in the future or get a lease for an apartment or be hired for certain jobs.