[ZoF]

Eh, this article doesn't really make sense....

Basically the author defaulted on their student loan instead of deferring and makes an argument as to why it was a good decision for them.

The reason I say it doesn't make much sense is that, imo, it really glosses over just how big a deal defaulting on a loan is. While the author is talking about themself, a naive individual might get the idea that this is the right choice for them, when it almost certainly is not.

Trashing your credit and not being able to take out a house/car loan is a pretty huge deal for most people...

Just keep in mind defaulting on a loan isn't something that you just _do_ and then _undo_ with no consequences(other than saving on that interest lel)...

That shit stays with you for at least 7 years and if you're trying to get a loan for anything having defaulted on your only loan ever... Good luck.

[digisign]

7 years when you're ~22, who cares?

The point, which was a bit buried, was that by defaulting and having her wages garnished, resulted in much better progress in paying the debt off ... because there is no interest, and probably because of inflation as well.

I'm not sure that's accurate, but it's what the piece implies.

[ZoF]

Yeah, I grokked the point, and I strongly disagree with the conclusion.

For anyone with a graduate degree that's competent in their field the chances of going 4+years jobless is pretty low. And I would assert that if you get a (well-paying)job earlier than 4 years out of college its worth it to not default on your loans.

Why? By the end of the second year of a salaried job I would be highly surprised if that shitty credit score hasn't fucked up your life in at least one major way.

It's really about how much you think you're worth. If you don't think you'll need a loan in the next 7 years then save yourself some money I guess?? Don't forget if you get ANY job at all in the meantime, because they can just garnish your wages if they do.

It seems to be implied that life with bad credit isn't so bad(and it isn't), but we live in a material world. People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist. I just think anyone acting on this advice without REALLY thinking about it, will regret it more often than not.

[phil21]

If you don't need to buy a house or finance a car, living with bad credit isn't super horrible. It can be quite inconvenient, and more expensive overall though.

Cell phone plane? Yeah, you're on pre-paid. Have fun paying double (although this has been getting better!).

Electric/gas/internet hookup? Well, in most (all?) places in the US, the gas/electric/phone company are required to serve you but probably will require a deposit of a few hundred bucks each. Cable might be a crapshoot - probably the same deposit deal though.

The real issues are finding a place to rent and getting a decent job. Almost all decent jobs require credit checks now, and that's a travesty.

So yeah, if you have money it's not too bad. I lived with horrible credit (defaulted on some small credit cards and a lease after I lost a job) for quite some time, but I also happened to be in a career that after a couple tough years I was making enough that the lack of credit wasn't really something that I worried about.

Now I have good credit, and really the only major difference so far is I qualify for credit cards with perks. I have yet to buy a house, and I buy my cars cash.

[prewett]

I'm not in favor of defaulting on loans. But having bad credit doesn't necessarily destroy your life. I've never taken out a loan in the past 17 years, yet I've bought several cars (including one new). The only thing I would need a loan for would be a house, but being single and with property tax in my area at 2%, I'd rather not.

> Why? By the end of the second year of a salaried job I would be highly surprised if that shitty credit score hasn't fucked up your life in at least one major way.

She was having trouble getting a job as a waitress, I think she did not see the scenario of the salaried job you speak of as being relevant to her.

> People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist.

I know it's not popular these days, but one can actually limit oneself to things you can afford. If you do that, you don't need a loan, and hence, bad credit is irrelevant. And if you have a habit of buying things you can't afford, bad credit is in your future...

[ZoF]

Completely agree, for the proportion of the population that doesn't take loans ever this certainly seems to make some sense.

I'm just saying that, imo, for the vast majority of Americans the ability to get a loan is more important then she implies. Not to mention the fact that Phone-Carriers/Recruitment-Agencies/Utilities-Vendors check credit scores as well.

It's effectively coming to terms with the fact that you won't be getting a new car/home for 7 years unless you can afford to buy it with liquid assets... So, unless your income is so great that you can save up for a car/house on TOP of affording rent + food/clothes/etc + student loans, you won't be getting one until your credit recovers.

You last paragraph is basically my point, limiting oneself is _not_ popular these days, that's exactly why most American's would regret this decision because eventually they would find themselves limited. Perhaps they should be.

I feel like I should state down here that:

a.) I hope I never have to borrow money in my life, but I probably will. I don't think it's the "right" way to live or anything.

b.) I think this does make some sense for certain people.

c.)I don't think bad credit ruins your life, but I do think it has a bigger impact than was implied.

[xtracto]

>It seems to be implied that life with bad credit isn't so bad(and it isn't), but we live in a material world. People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist. I just think anyone acting on this advice without REALLY thinking about it, will regret it more often than not.

That is the mainstream culture you see in the USA. Other countries do not have that culture (in Mexico some people call it the "USAnd-throw"... and enjoy getting used stuff thrown away by Americans, in Germany [at least in the east] people do not value "stuff" as much as in the US).

[gnaritas]

If 7 years is less than it'd take to pay back the loan without being broke the entire time, default is a viable option.

> It seems to be implied that life with bad credit isn't so bad(and it isn't), but we live in a material world.

Not everyone is material.

> People want to buy shit, often-times shit that's more expensive then they can currently afford, it's why loans exist.

Many don't, many like to live within their means and shun such material excess or attempts to keep up with the Jone's. Many laugh at the ignorance of wasting money on shiny rocks and expensive habits and life events. You presume too much about other people.

[ZoF]

> You presume too much about other people.

Really, do I?

I hope I never take a loan in my life, doesn't mean I can't comprehend that the vast majority of Americans with an income greater than 50K a year rely on loans for their cars/housing.

A bad credit score also affects future jobs/utilities/cellphone/etc...

>If 7 years is less than it'd take to pay back the loan without being broke the entire time, default is a viable option.

Explain this logic please.

>Not everyone is material.

Ok

>Many don't, many like to live within their means and shun such material excess or attempts to keep up with the Jone's. Many laugh at the ignorance of wasting money on shiny rocks and expensive habits and life events.

Read:Not everyone's material

[gnaritas]

> Explain this logic please.

Pain of bad credit vs pain of paying back loan, choose lesser pain. Debt can and should be walked away from when that's the better option than paying it back.

[ZoF]

But she still has to pay it back in the end, so why would the 7 year payment plan matter?

[gnaritas]

I'm clearly talking about defaulting on loans in general; default generally means you don't pay it back. If this isn't such a case then obviously it doesn't apply.

[Aqueous]

I mean if you can weather the storm of bad credit and have a decent shot at digging yourself out of it in the future, being able to pay no interest on that debt is a huge benefit

as usual it is all about the cost-benefit analysis. the author maybe should have put that disclaimer at the end there.