You Missed A Student Loan Payment. Should You Be Concerned?

October 15, 2015

Connect Member

Communications Manager at Credible, an online marketplace for student loan refinancing.

You’re busy with work, your personal life, and making sure you pay rent, and suddenly realize you’ve missed a student loan payment.

Relax and don’t panic!

While it is important to repay your student loans on time, you will survive if you have missed one. 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 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.

Consequences of Late Student Loan Payments 

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

  • Late fees: Lenders all have their own policies 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 be 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.
  • Lower credit score: If your payment is more than 30 days late, your lender may report you to the major credit bureaus. This can cause a ding on your credit score.
  • Loan default: Student 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 Repayments in the Future

To remain financially stable, make your student loan repayments 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, if you miss one student loan repayment, you shouldn’t be overly concerned. You should be concerned, however, if it becomes a habit or if you are struggling to afford the minimum loan payments.

If you are worried about your student loan repayments, check out this guide on your options: How To Choose The Best Student Loan Repayment Plan. Be sure to research and compare all of your repayment options to determine which is best for your personal financial situation. If you are interested in student loan refinancing, check out Credible to see personalized refinance offers from multiple lenders after completing a single form.

Kristen Caron is a member of the DailyWorth Connect program. Read more about the program here.