Loan Deferments

How Deferments Work

When you are unable to repay a loan, you may go into deferment. Different loans have different requirements, so you’ll want to investigate your loan before attempting a student loan deferment. This page summarizes the concept of deferment so you can better understand whether or not you’re eligible – and if it’s a good idea.

What is Student Loan Deferment?

When you’re in deferment, you are not required to make payments on your loan. In other words, you take a break from payments. Of course, you have to qualify for this luxury.

How to Qualify

Several events may qualify you for a deferment. Some of the most common deferments are listed below:

• Unemployment deferments
• In School deferments
• Military deferments
• Career related deferments

You should also see if there are other deferments that you might qualify for. For some examples, visit the Federal Student Aid Website.

Interest During Deferment

While your loan is in deferment, you may still be charged interest. For subsidized loans, the interest will most likely not accrue. However, unsubsidized loans will continue to have interest charged against them. You can capitalize the interest charges (or add them to the balance of the loan) if you like. If you capitalize, remember that you’ll just have to pay more later.

If You Don’t Qualify

If you don’t qualify for any type of deferment, consider some alternatives:

• Loan Consolidation may restructure your payments
• You can ask for payment due dates on certain days of the month
• You can request a temporary forbearance