A student who has stopped repaying their private loan suggests their account has defaulted. When a student deliberately stops their payments, it is considered a strategic default.
Often a student might find that after several years of paying back their loan, the unsettled balance hasn’t lowered very much. In some cases the outstanding balance actually increases thanks to the high rate of interest.
This is why some students will contemplate a strategic default. Often there appears to be no other available alternative. This course of action is best matched to those who are likely to be late on their payments. However, it is something that a growing number of students are thinking about because of the extremely minimal payment choices accessible to them.
This decision to strategically default is one that ought to be taken very seriously. No ethical advisor can instruct you as to whether you ought to travel down this route or not. The student must weigh up all the pros and cons before all else.
We have actually assembled this practical infographic to help offer some help and advice that ought to ideally make your decision much easier.
Infographic by www.mycreditcounselor.net