How to Defer Student Loan

There can be times when you intend to go back to school, or may be you are going through some financially turbulent times and the need to defer payments on your student loan may arise until the situation changes for good. The process of deferment allows you to postpone payments for a certain period of time on the promise that you resume payments once you are capable to do so or when the period of deferment ends. Deferment of payments actually is the best way to avoid you from defaulting on your loans, a scenario that is best to avoid at all circumstances. However, once you choose to defer payments for a particular period of time, there’s all the possibility that the rate of interest might keep accruing. So, it is best to be aware of all the consequences of your decision. All student loan borrowers have the privilege to defer their payments at least once during the period of repayment on meeting the specified criteria to do so.

Let’s find out the ways of how to defer student loans:

  • First step is to determine whether you fulfill all the criteria and are eligible to defer your student loan. There are more than 14 different types of deferments available, but you will get know how many are available to you depending on the time when you took your student loan. Just to give an idea,  borrowers of loans that originated after July 1, 1993 can apply for deferment if are unemployed, or they are returning to school at least half time, are experiencing financial hardship, are enrolled in rehabilitation training or participating in some graduate fellowship
  • Once you have found out the criteria for loan deferment, you have to understand specific eligibility requirements and the period till which the deferment will remain effective. For example, you need to be enrolled at an eligible institution at least half time, with the school certifying your enrollment to fit in the criteria for a student deferment. Unlike other deferment options, there is no specific time limit on when to defer your student loans in order to go back to school. You shall remain qualified till you drop below half-time status or until you graduate
  • Then the time comes to contact the lender of your student loan and file the request of deferment. You may file the request online or in person depending on the lender and at any point of time never forget to submit, along with your request, proper documents to support your need to defer your payments, be it credible proof of going back to school or financial hardships. Furthermore, always keep tracking the progress of your request. Keep calling the loan representative to get the latest status on whether your request has been approved or not. This will help you to hasten the process of approval, and you will get to know if you need to submit any more documents for the approval
  • Once approved, you need to decide if you want to have the interest capitalized and added onto the principal of the loan or continue paying the loan’s interest each month. The former option will be expensive and will cost you more money, for the rate of interest will get higher as the loan’s balance will increase. You must review your current financial situation and determine which option will suit you the best and help you save money. Be agile and sharp and always keep all the copies of the documentation related to your student loan deferment. They will act as evidence if in the future any discrepancy arises between you and the loan provider

These were the instructions that you need to follow in order to learn how to defer student loan, giving you the opportunity to suspend your payments temporarily when you are not in a position to do so.

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