search facebook-square linkedin-square twitter envelope

It happens to the best of graduates. You get caught up in work and other expenses, and you don’t realize you missed a student loan payment by 10 days. Your first reaction might be to panic and call the lender in tears.

Relax.

While it is important to pay your student loan payments on time, you will survive if you have missed a student loan payment. Most lenders have a grace period, so your missed payment might not have been reported to the credit bureaus yet or suffered from a late fee. As soon as you realize that you missed a student loan payment, you should call your loan lender. Explain the circumstances. If this is your first offense, the lender might be gracious and waive any fees. Even if they do not, calling the lender allows you to make a payment over the phone that can be processed immediately.

What happens if you miss a student loan payment?

Missing one student loan payment will not set you back unless you forgo the payment for too long. Here are the consequences that normally occur with late payments.

  • Late Fees: Each lender has their own policy for late fees. Your lender might charge you a percentage of your minimum payment. Depending on the size of your loan, the late fee could by minor or very costly. It is wise to call your lender and to know what the late fee consequences are. For your first offense, it might also be worth calling to talk to someone to see if this fee can be waived, since it is your first offense.
  • Lower Credit Score: Typically, if your payment is more than 45 days late, then it will be reported to the major credit bureaus. This can cause a ding on your credit score, and it will take several months of on-time payments to boost your score back up.
  • Loan Default: Loan default happens after a very long lapse of time. For federal loans, default occurs after 270 days of no payments. This is definitely to be avoided.

How to avoid late student loan payments

To remain financially stable, make your student loan payments on time. Here are three strategies to stay on top of the repayment process:

  • Automatic Payments: The easiest way to remember to pay your loan is to have the money taken out automatically. Certain lenders even offer a discounted APR for enrolling in automatic payments.
  • Break Up Payments: If you can pay your student loans weekly or bi-weekly, then pursue that option. It can be a struggle to pay $300 a month while living on a tight paycheck, but paying $75 a week can be more doable.
  • Let the Lender Know: When your financial situation is not the best and you know a late payment is unavoidable, call the lender and explain your situation. The lender might be able to grant you an extension. It is better to stay in contact with the lender and be upfront about your loan rather than trying to avoid them.

Ultimately, you should not be concerned if you have missed a student loan payment. You should be concerned, however, if it becomes a habit or if you are struggling to afford the minimum loan payments.

Credible is a multi-lender marketplace that allows borrowers to request competitive loan offers from vetted lenders, without affecting their credit scores.