Many employees are deeply indebted because of student loans and have yet to land a job that pays enough to cover the cost of paying off the degree. Federal loans will work with people who can’t pay, but private loans are stricter. So what should you do if you can’t pay?

Make Threats…

Some experts claim that the best way to get a private student loan company to work with you is to threaten to default on your loan. Default means that a borrower has not made any payments on the loan for a certain length of time, which is usually forty days or less for private loans.

If you were to actually default on your loan, your credit score would decrease. The loan would also go into collections, which means that a different company would collect your debt, and you would be responsible for paying fees in addition to your original loan.

But Don’t Follow Through on Them

Obviously defaulting on your loan is bad for you, but it’s even worse for the company. A borrower who has already missed several payments is not any more likely to pay simply because of the loan defaults.

That’s why private companies are more likely to make more flexible arrangements for a borrower who has threatened to default. The company wants their money, and it has a better chance at getting it by working with you than having you work with a collection agency.

What Are the Options?

Your options are limited to what your loan company offers you. Although it’s rare with private student loans, some companies offer forbearance, which means that you are excused from making payments for a specified time period.

Other companies allow borrowers experiencing hardships to make minimum payments for a few months.