Refinancing a loan can feel like a breath of fresh air. You often see it with a car loan or a mortgage. You trade in your old loan for a new one, hopefully with a lower interest rate and a more manageable monthly payment. It’s a financial tool that promises simplicity and savings. So, when you’re staring at a massive private student loan balance, refinancing seems like the obvious move. But is swapping one private loan for another really the best path forward? It might not be the fix you think it is. Your Lender Can and Likely Will Sue You When you stop making payments on a private student loan, the clock starts ticking. Unlike federal loans, which have a well-defined default process, private lenders often move more quickly. They are financial institutions, and your loan is an asset on their books. They will file a lawsuit to collect on that debt, and they are very good at it. A lawsuit can result in a court order that says you officially owe the money. Once a lender has a judgment, they have powerful legal tools to force you to pay. A Court Judgment Can Lead to Wage Garnishment That […]
