Having trouble paying your student loans? You might be surprised about this little know fact about consolidation student loans. The concept of deferment and forbearance might be new to you, but it's alive and well.
These topics come in handy because at times, you may find it financially difficult or impossible to repay your student loan. The worst thing that you can do is bury your head in the sand and ignore your payments (and your lender) completely. The best thing that you can do is contact your lender and apply for a deferment, forbearance, or cancellation of your loan.
Deferment: With a deferment, your lender grants you a temporary reprieve from repaying your student loan based on a specific condition, such as unemployment, temporary disability, or a return to graduate school on a full-time basis. For federal loans, the federal government pays the interest that accrues during the deferment period, so your loan balance won't increase. A deferment usually lasts six months, and you are limited in the total number of deferments you can take over the life of the loan.
Forbearance: With a forbearance, your lender grants you permission to reduce or stop your loan payments for a certain period of time at its discretion (one common reason is economic hardship). However, interest continues to accrue, even on federal loans. Like a deferment, a forbearance usually lasts six months, and the total number allowed over the life of the loan is limited.
Loan Cancellation: With a cancellation, your loan is permanently wiped off your list of financial obligations. It's not easy to qualify for a cancellation, though. Situations when this may be allowed are the death or permanent total disability of the borrower, or if the borrower takes a job teaching needy populations in certain geographic areas. Typically, student loans can't be discharged in bankruptcy.
Remember, these things don't happen on their own. You'll need to find the appropriate application from your lender, attach any supporting documentation, and follow up to make sure that your application has been processed correctly.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment