Understanding Loan Deferment
A loan deferment is the putting off of a loan repayment, though this
is not something that most people ever have personal experience with. A loan
deferment is only offered under very specific circumstances, circumstances
that not everyone will experience or be able to qualify for. Because of this,
it is important for your credit score as well as your future buying power
to make all of your loan payments on time. Resist temptation to max out your credit cards. In the long run it won't help you to pay off your loan and will only dig your further
into debt. If you are having trouble paying off your loan you may want to
look into debt consolidation services to reduce your monthly payments so you
don't have to consider loan deferment.
For some loans, such as
subsidized FFEL Safford loans you will not have to pay on the principal or interest
during the period of deferment, but other types of loans will require you
to pay the interest during the period of deferment. If you do not pay the
interest the lender may be able to capitalize the interest when your period
of deferment ends, which will mean that you will actually end up owing more money
on the principal balance.
Most students will not be granted a loan
deferment automatically, even if they are doing something that qualifies them
for the deferment. Instead, the student must formally request a deferment
and you will need to contact your lender to determine what the process is for
the formal request. When you receive information on the process, make sure
that you follow it exactly, having all of your paperwork and proof of qualification
in the proper order and format.
Even after you have put in the
request for the loan deferment, it is important that you continue to pay on
it. It is not until you actually receive an approval that you should stop
paying on the loan. Remember that you cannot defer a loan that has been
defaulted on, so it is important to continue making these payments until you hear
back from your lender. Try to be patient as the process of approving the
determent takes some time.
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