According to The Elective, about 18% of borrowers were in default on their loans. Defaulting on a loan has severe consequences for borrowers, and avoiding it at all costs is necessary. Defaulting on a loan long-term impacts a borrower’s financial health. It takes years for negative information to be removed from a credit report, impacting a borrower’s ability to qualify for credit or other financial opportunities. Falling into a cycle of debt is challenging to break out of, but there are several steps borrowers need to take to avoid it. Establishing a budget, cutting down expenses, avoiding credit card use, and earning extra cash help borrowers stay out of debt.