Student Loan Forbearance
If you are having problems with the repayment process for your student loans, you should consider pursuing student loan forbearance. A loan forbearance program allows borrowers to restructure their payment plans, which rather simply lets individuals manage their monthly payments in better way. This program can help borrowers meet their loan repayment goals, and can be tailored to one’s individual financial situation. One can take advantage of student loan forbearance if one meets certain requirements and criteria. Through programs of forbearance for student loans, individuals are able to postpone your monthly payment on temporary basis, extend the repayment time and/or reduce loan payments.
Student loan forbearance enables you to manage your monthly loan repayment by reducing the amount or temporarily postponing the repayments. This way you get a chance to manage your expenses in a better manner. Also, if you are able to get it in the form of reduced repayment you can manage repaying the amount that you can afford instead of not making any repayments at all.
Applying for Forbearance
To apply for student loan forbearance, you need to get in touch with the organization that services your loan. Find out all the details and the eligibility criteria from the concerned department and apply.
Students can apply for a forbearance on a loan (or loans) if they are unable to make payments and if they do not qualify for a deferment. In this case, students can reduce or stop making payments for up to twelve months. There are two types of forbearance options: discretionary and mandatory. For discretionary forbearance, a student’s financial hardship and illness is considered. On the other hand, mandatory forbearance covers a broader area, and qualification requires you to be a member of the National Guard or else a part of the national service.
Is there a difference between federal student loan forbearance and deferment?
Both federal loan forbearance and deferment options can help students with their federal loan repayments. Students who find paying back difficult can apply for these options. It is important to note that even though both of these options can help students, they are different in a number of ways. In the case of deferment, students can put off the repayment on their principal balance. With the forbearance option, students can stop making payments or reduce their monthly payments substantially for up to a year. However, the interest rate on both subsidized and unsubsidized loans accrues with the forbearance option.
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