It is possible that any student loan that you took out many years ago can cause havoc in your later life. This is because this debt is going to require payment and it could affect you in business, if you have failed 12 monthly payments. It can put you in a bracket of students called ‘wage garnishment’; this gives the collection agency the power, without going to court, to take a whopping 15% after tax, of your wages.
This is not great if your business is looking to open a merchant account; you might need to seek out a provider that specializes in bad credit merchant accounts.
Often high-risk merchant account providers are looking for those people who have experienced finical strain and they seem to offer a glimmer of hope to those who are in business and want to offer great customer service, but are limited to a cash based business because of a poor credit history.
However, this doesn’t have to be the case. Your business should not suffer and neither should your customers, there are options out there and getting the right deal for you is important.
No matter your past, student debt should not cause problems in the future. There is a drive to increase the number of students who have access to Federal student loans and to reduce the payments, which students face when they need to start repaying them.
You only get added to the ‘wage garnishment’ programme when you miss 12 monthly payments, if this is the case then the Federal government should be doing more to help you reduce your loan payments each month; this would ease the burden that puts people under pressure and results in unpaid payments.
Therefore, even if you intend to go into business a Federal student loan that is in ‘wage garnishment’ should not stop you taking your business idea to the next level.