Last week, Clark Howard reported a scary potential “gotcha” with a private student loans:
“Picture this: You’re paying on your student loan as agreed and suddenly your grandparent or parent who co-signed the loan dies.
Do you get a temporary forbearance or a note of condolence from the lender? No. According to the Consumer Financial Protection Bureau, you’re told the entire loan is now in automatic default.” (click here to read his entire post)
He goes on to say that if you cannot pay off the loan immediately, your credit can be ruined, your wages garnished, and even your tax returns confiscated.
While we would not say never, ever get a private student loan, it is certainly something to think long and hard about before proceeding.