Learn About Ways to Delay Your Payment

Postponing Repayment: Deferment

Some of us would want to delay the repayment of our loan because this will make payment easier. Other people would want to do this because of reenrollment, extraordinary financial trouble and employment.  When in doubt of your repayment scheme and if you cannot seem to pay on time, it is wise for you to consult the organization that services your loan. You might be able to qualify for deferment, forbearance, or other forms of payment relief. Payment relief delays loan payment, commonly, by means of deferment and forbearance.

A deferment suspends your loan payments temporarily because of reenrollment, extraordinary financial trouble and unemployment. You don't pay any interest while in deferment for FFEL, direct loans, and subsidized loans. In any other loan, your interest accrues the loan principal, increases the amount owed and making it harder to pay off. You need an application for deferment to your service or loan provider and pay until the deferment status is confirmed. If the loan is not paid for as scheduled, you become a 'delinquent' borrower who may be defaulted.

Military Service Deferment may be availed for those called to military duty during the war or for those who are called on active national guard duty.

Postponing Repayment: Forbearance

When a borrower experiencing financial difficulty is unqualified for deferment, he may avail of forbearance. When you apply for forbearance, you must pay interest when it accumulates. This applies to any subsidized or unsubsidized loan. You need an application of forbearance to the service or loan provider. They, in turn, can grant you forbearance of twelve months to three years maximum. You must make payment until forbearance has been confirmed.

A deferment is good if you don’t want to pay off the interest and the loan altogether for a certain period of time while in forbearance, you pay interest. In deferment and forbearance, you need to know how to contact your service or loan provider. This is important because, if you delay, you may become a ‘delinquent’ borrower and get in default. Default is even more difficult to settle.

During deferment and forbearance, it is wise to augment the flow of your income depending on your circumstances. Get a job. Ask from friends and family. Cut on costs. Open up a business. You have to be aggressive so that you can settle your loan. Remember that deferment and forbearance are temporary solutions to debt.

Aside from deferment and forbearance, you may also avail of consolidation. Consolidation puts loans together; therefore adjusting the payment of your loans. Adjusting your loans would mean modifications in the interest, time period to pay off the loan, and the amount that you will pay. Consolidation applies to some loans and it is better to contact the service or loan provider for consultation.

You may have doubts in your repayment scheme and you may start to reorient yourself to other repayment options. Under the FFEL, you can change your repayment schedule once a year. On the other hand, if you have acquired Direct Student Loan Program, you can change your repayment schedule as long as the maximum period of repayment under the new plan is longer than your current Direct Loans repayment schedule.