Length of Time
Forbearance is often best for those who know their situation is temporary and if they don’t qualify for deferment. Forbearance lets you ask your servicer to pause your payments for up to 12 months at a time.
Deferment can work better for those who have some subsidized student loans and who want to avoid interest accrual, or for those who aren’t sure how long their financial difficulties will last. Deferment can be enacted for up to three years.
How to Apply
You can’t be in default if you want to qualify for either program. Contact your servicer to discuss your options as soon as you realize that you might not be able to make payments.
You’ll need your servicer to help you whether you choose forbearance or deferment, and you must keep making your payments until you’re approved. The main exception is if you go back to school and you’re enrolled at least part-time. Your servicer may automatically place you in deferment in this case.
How Interest Accrues
All the accrued interest will be summed up at the end of the period and added to your loan balance if you don’t make interest payments during your deferment or forbearance. Both of these programs can increase the total amount that you owe. Continue reading “Forbearance vs. Deferment: Which Should You Choose?”