What to Do About Your Student Loans and Other Bills After a Disaster

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Preparing for a natural disaster can be stressful, but being late on your bills while also dealing with the aftermath can be daunting. Just ask Tami Kurtz.

Kurtz, a real estate agent at Triplemint in New York, had catastrophic damage to her home after Superstorm Sandy in 2012 and found it difficult to manage life outside of recovery.

“Working with the banks, insurance providers, contractors, and [the Federal Emergency Management Agency] is a full-time job,” she said. “In my case, recovery was a full-time job 15 to 18 hours a day for the first four months. I was able to completely gut my home, followed by rebuilding within seven months of the hurricane. I know many people had not rebuilt, nor were back in their homes for two to five years.”

Last year, hurricanes Harvey, Maria, and Irma crushed parts of the Caribbean, Puerto Rico, and the southern U.S., causing weeks (and months) of power loss and damage to millions of residences. It’s not exactly easy to get back to work and stay up to date on bills, especially if you can’t return home because you were displaced.

Falling behind on bills, such as student loans or credit card payments, can hurt your credit. You could end up in default, which can cause your credit score to tank and hurt your chances of getting approved for credit, including a mortgage, in the future.

Be mindful of your finances before a hurricane hits and know what you need to have ready after the storm passes.

How to prepare before a natural disaster hits

Kurtz recommends setting enough money aside to cover your cost of living in case you’re displaced.

“I highly recommend you keep a set amount aside, equal to five to six months’ cost of living at a minimum,” she said. “I drained my savings during this time and found it necessary to withdraw funds from my 401(k) as well. Insurance only covers a portion of rebuilding and nothing for your personal property, such as furniture, clothing, art, or computers.”

Joe Hogan, director of financial planning for Mariaca Wealth Management in Lake Worth, Florida, said you should review all your coverage.

“Consider uploading financial records, legal documents, and medical information to a secure online cloud-based document storage system,” he said. “Contain physical documents and removable external hard drives in fire- and flood-protected safes or safe deposit boxes.”

Hogan also recommends documenting your property. Record video of what your home looks like before a storm hits. Also, if it’s far enough in advance, make sure your savings account is stocked. If you’re out of work, you’ll need to cover a lot more than just bills.

“Establish a liquid emergency fund equal to three to six months of expenses,” he advised. “This will help provide for short-term financial needs during any period of financial uncertainty.”

Getting financial help after a natural disaster

Regardless of what payments you need to make, you might have quite a few to handle after a disaster strikes. Luckily, there are a few ways to cover your bills and debt in the immediate aftermath of a natural disaster.

To avoid falling behind and damaging your credit score, take action right away.

Student loans

Both federal and private student loans have a few payment assistance options in case of emergencies.

If you’re having trouble making federal student loan payments, you can apply for help through forbearance. Forbearance will pause or reduce your payments for up to 90 days.

Forbearance won’t reduce the amount you owe. Instead, your delayed payments will get incorporated into your original balance. You might be able to pause payments for up to 12 months, depending on your situation. Keep in mind that interest still accrues during forbearance.

If you have private student loans, Hogan said you can usually get similar benefits, but it depends on your loan servicer. You’ll need to contact your servicer to mention your disaster hardship to see if there’s anything for which you can qualify.

If you’re a student still enrolled in school, contact your financial aid office.

Personal loans, auto loans, and credit cards

Many lenders have plans in place to help you manage your payments in the wake of a natural disaster, but it’s not guaranteed, Hogan said. It’s up to each loan provider to determine what should be offered to customers.

“Private lenders often offer forbearance on loans due to natural disasters,” he said. “[You] should consult with the lender prior to a natural disaster to learn about the policy.”

Private lenders aren’t obligated to offer financial assistance, which is why any relief is helpful.

Each lender offers its own type of help, according to Consumer Reports. Some will waive late fees, while others might pause payments for a certain period after a storm has passed. Kurtz’s experience with her credit card company was good at first, but it didn’t stay that way.

“I was able to talk to my credit card companies and defer those payments — in some cases — one, two, and three months without interest or late-fee charges,” Kurtz said. “I will say, the minute I purchased a plane ticket to visit my ailing father, American Express told me they could no longer defer payments if I was going to spend money on air travel. They did not care or didn’t believe that I had an ailing parent to attend to.”

Mortgage payments

Not all home loans are created or managed equally. If you have an FHA loan, you might qualify for Federal Housing Administration disaster relief from the U.S. Department of Housing and Urban Development.

While it depends on your specific situation, you might be able to get late fees waived if you miss payments. Unfortunately, you’re still responsible for making mortgage payments even if a hurricane destroyed your home.

“When a hurricane strikes, there is a huge financial stress on the victims,” Kurtz said. “In addition to paying for your immediate occupancy, you must keep paying the mortgage on the uninhabitable property. So while you’ve lost everything, you end up paying for two homes — one you can live in, and one you can’t.”

Some private lenders offer relief as well. Fannie Mae, for example, can suspend or reduce payments for up to 12 months.

You might also qualify for a loan modification so that when it’s time to start repaying your mortgage, your monthly payments aren’t too high that you won’t be able to afford them.

Don’t let a natural disaster ruin your credit

You might have a long road to recovery with your home and community, but don’t let your bills keep you down. Prepare ahead of time so that you can concentrate on other things when the storm passes.

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LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.58% APR to 14.87% APR (with AutoPay). Variable rates from 6.275% APR to 12.575% APR (with AutoPay). SoFi rate ranges are current as of July 16, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.275% APR assumes current 1-month LIBOR rate of 2.10% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  • Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  1. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  2. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
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6.28% – 14.87%1$5,000 - $100,000
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4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.