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Missing A Student Loan Repayment: Here’s What You Can Do

missing a student loan payment

It’s essential to pay off student loan debts. We all know that. But sometimes, due to various reasons, you can miss your student loan repayments. Many people have other bills and financial obligations to take care of. Regardless, missing a student loan payment isn’t something to be scared of. 

If you take quick action, you can prevent your credit score from plummeting and putting a risk on your financial future. For example, go through this guide if you miss a student loan payment. We’ll show you everything you need to know to remedy the situation. 

Let’s begin. 

Missing A Student Loan Payment On Your Student Loans 

How many days after missing a student loan payment do your loans go into default? We’ll answer this question, but there are several things you need to remember. We’ll go through each of them in this section. 

First, the duration of how late your loan payment is managed depends on the lender. For example, the loan contract should explain the late payment process if you’re dealing with a private student loan

In the same way, the U.S. Department of Education explains how late payments are processed on its website. But here’s what you need to know. When you miss a student loan payment, your loan status changes from “current” to “delinquent.” 

Until you either make that payment or request a forbearance or deferment, your status will stay at “delinquent.” So if you’re missing a student loan payment, you have to act fast, or there could be grievous consequences. 

Late Fees From Missing A Student Loan Payment 

You may incur a late fee penalty when you miss your payment for the first month. Now, the fee you’ll pay depends on your loan lender. So let’s say you have a $400 loan payment on your student loans. You could be charged 5% after 30 days for late fees. 

That means you would have to pay an additional $20. And this amount will continue to increase as long as your status is in “delinquent” mode.  

Missing A Student Loan Payment And Credit Scores 

When you’re late on your student loan payments, your servicer can report your delinquency to three primary credit bureaus. When you make late payments after 30 days, 90 days, or 270 days, you’ll receive different actions (or consequences) on each of them. 

What Happens After 30 Days 

 Private student loan lenders have different policies. So you’ll have to contact them if you know you’ll be late on your loan payment. 

Missing Payments After 90 Days 

Private loan policies for servicers and lenders vary, so you should find out from them. 

Also, you’ll reduce your credit score when you miss a payment for at least 90 days. And that can affect your ability to take out a new credit such as a car loan or credit card. Did you know that if you have credit card debt, it may increase your interest rates? 

In short, being late on your loan payments could affect the rest of your student debts. And that’s something you don’t want. 

What Happens After 270 Days 

Missing a student loan payment after 270 days upgrades your status from “delinquent” to “default.” Remember that student loan default can occur faster with private student loans. 

Now, It’s a big deal to default on your student loans. And that’s because your student debts are due in full, together with any accumulated interest, penalties, and fines (like the ones charged by collection agencies). 

Several Options To Consider If You Missed A Student Loan Payment 

missing a student loan payment

Regardless of missing a student loan payment for so long, there are still some options for you to try out. The first step is to contact your loan servicer or lender and admit you made a mistake. (We know it may not have been your fault, but this approach can help you reduce the problem.) 

Then, let the servicers know about any financial hardships you’re going through. So, for example, if you missed a student loan payment due to a job loss, medical emergency, or unforeseen circumstances, let them know. The lenders might offer you a solution. 

Also, you can apply for a forbearance or deferment to reduce or postpone the payments depending on your situation. 

Talk to your loan servicer if you want to get your student loan back to its previous state. They can help you get your student loan payment back to its original state. But keep in mind that you’ll pay fees. 

Consider Writing A Goodwill Letter 

If your credit report is in good shape but you missed some payments, you can write a goodwill letter if it’s hurting your credit scores. Then, of course, you can reduce your debts or make your monthly payments on time to improve your credit rating. 

But a goodwill letter is a less conventional way to regain your good credit scores. 

What Is A Goodwill Letter? 

A goodwill letter is a self-written document sent to the loan servicer that reports your missed payments to remove the negative information. 

Also, you can use goodwill letters in situations where the report sent to you is accurate. However, the missed payment occurred under unique circumstances. 

For example, maybe you were late on your payments because of a changed address. Unfortunately, many people forget to update their mailing addresses when they change locations. This can result in unpaid bills. 

Furthermore, you can use the goodwill letter when you have to focus your finances on health problems or are involved in an accident. And once your late payments are reported, it will negatively affect your credit score. 

Negative Reports Can Stay For Seven Years 

When you get bad credit scores, they can stay on your report for seven years. So a successful goodwill letter can be a massive benefit to you. Remember that a goodwill letter is a way of apologizing for your late payments. 

However, it’s also about explaining your intentions to make payments on time. Then, if the late payment was a false report, you could report it to the three bureaus: TransUnion, Experian, or Equifax. 

Also, remember that you’re not in control when sending the goodwill letter. You’re at the mercy of your creditor. Sending a goodwill letter is like asking for a second chance. So you can’t be sure that sending the letter will yield good results. 

But you have nothing to lose, either. So if you can regain your good credit score, you should take it. Besides, if your record is good, you may have a chance of getting your goodwill letter accepted. 

When Should You Use A Goodwill Letter? 

If you have a history of missing many payments or other risk factors like high credit card balances, you’re less likely to get your goodwill letter accepted. You’ll also have less chance of acceptance if you don’t have a good excuse for missing a student loan payment. 

But don’t lose hope yet. Your loan creditor might agree to remove the missed payments in some situations. For example, if you’ve never been delinquent on your loans or caught up on your missed payments immediately, the lender might accept your plea. 

If you have a good track record of making payments on time and good credit history, here are some scenarios you could send a goodwill letter. 

  • You relocated and didn’t receive any bill at your new address 
  • Your payments never went through due to technical faults such as improper autopay. 
  • Financial difficulties such as a divorce or losing a job cause you to miss payments. 
  • You had a medical crisis, causing you to miss payments 
  • You changed banks, and your loan payments were left out during the transition 

Regardless, the letter should be about asking for forgiveness or mercy and relief from accidental missed payments. But you should also state how it’ll never happen again. So you should only send it if you’re ready never to miss a payment again. 

Do Goodwill Letters Ever Work? 

Unfortunately, no specific evidence shows how often a goodwill letter works. Moreover, numerous banks make it clear that they won’t act in your favor. 

But some banks explain that the best way to tackle an adverse credit history is to rebuild your credit and establish a good record of on-time monthly payments. Regardless, goodwill letters can work. 

Your letter is more likely to get accepted for the removal of late payments. However, it won’t work on severe credit offenses. So if you want the services to remove your account from collections, goodwill letters won’t work. 

Regardless, you don’t lose anything when you send a goodwill letter. The goal is to ask for a plea, and you know (or must know) fully well that you may or may not get the desired results. 

Now, let’s show you how to write a good goodwill letter. 

How To Write The Best Goodwill Letter 

When writing the goodwill letter, you should take your time and include as relevant information as possible. Keep in mind the five following steps when writing the goodwill letter. 

1. Write In A Genuine Tone 

A sincere tone will do the trick since the missed payments were from you, whether intentional or not. So it pays to be humble and thankful than writing in a frustrated or angry tone. Remember that you’re asking for a favor, and the lender isn’t obligated to remove late payments from your record. 

2. Provide Proof Of Mistakes And Relevant Documentation 

You need to provide proof if the fault is from your loan lender. Sometimes, the fault might come from the credit servicer, not the lender. For example, it could have been a simple typo. If you called the servicer about this mistake, provide the lender proof of that correspondence. 

3. Prove That You Don’t Miss Payments 

This specific point is about regaining trust. Your lender is more likely to remove the missed payments if they see you usually don’t miss payments. They’ll likely give you a break if this is the first time. 

4. Take Responsibility Of The Late Payments 

You should write explaining the circumstances that caused you to miss the loan payments. You should write it in a transparent, careful tone. It goes a long way to take responsibility for the action, making an excellent goodwill letter. 

5. Keep It Short And Simple 

Even though you might be tempted to include as much information as possible, only have relevant ones. However, try to keep it simple, short, and concise. In other words, get to the point. Several pages won’t do you any good. 

There’s a high chance your goodwill letter will be accepted if your credit history is good. That means you’ve been making on-time payments and you have a good credit score. 

If whatever caused the late payments doesn’t occur often, your lenders will be more receptive. However, a goodwill letter is probably not the best move if you have lots of negative credit history. 

How To Avoid Missing A Student Loan Payment 

missing a student loan payment

You can avoid asking this question: how many days after missing a student loan payment do your loans go into default? The best way to prevent missing a loan payment. 

You can set up strategies to help you avoid delinquency or student loan default. You can put measures to help you not repeat the late payments. Below, you’ll find some options to consider. 

1. Make Payments Through AutoPay 

Maybe you genuinely forgot to make your monthly student loan payments. If that’s the case, setting up an autopay can help you. Also, loan creditors love it when you register for automatic payments. They decrease your monthly interest rate for signing up for an autopay with them. 

Have a consistent automatic payment if you got a bad credit score because you missed your student loan payments. That can help your credit score bounce back on its feet faster. 

2. Use Calendar Reminders And Alerts 

Another effective way is to organize your finances to help you remember your due dates effectively. For example, if you don’t prefer paper mail, register for email notifications or e-statements on the due dates of your loan. 

If your calendar will work for you, set calendar alerts to help regularly remind you of your payments. You can equally find a better way that works for you. 

3. Inquire About Payment Deferment 

If autopay doesn’t work for you, try changing the due date of your student loan to a date that matches your paycheck. You can get this option for several student loan servicers. 

Final Thoughts 

Missing a student loan payment is never a good idea. However, we understand that there are numerous unforeseen circumstances in this world. So, if you’ve missed your student loan payment, don’t panic. Instead, go through this guide and take the necessary steps forward. When late loan payments get out of control, it can affect your credit score, money, and financial future.