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Lower Rates Are Waiting
Even the most responsible borrowers might find themselves struggling to keep up with student loan payments. If you're in this situation, you might refinance student loan to reduce your payment burden. Also check out our guide on deferment and forbearance to learn what your payment postponement options are.
Deferment is another option to consider in addition to refinance student loan. Deferment lets you stop making payments temporarily on your student loans. To receive this benefit, you must contact your lender to request deferment, usually by filling out a deferment request form. To be eligible for deferment on a federal loan, you must be:
If you are enrolled in an accredited undergraduate, graduate, or professional degree program, you can request an in-school deferment on federal student loans. You will have to provide proof of at least half-time enrollment each semester. If you are unemployed, experiencing economic hardship, or in the military and deployed, you can request deferment for up to a year at a time for a total of up to three years over the life of the loan. With private student loans, you might also be able to request deferment if you are in school, having financial difficulties, or in the military.
Interest charges continue to accrue even when your loans are in deferment. When you're in deferment, though, you will only be responsible for the interest payments on unsubsidized loans. For subsidized federal loans, the government will pay the interest that accrues during periods of deferment. Unsubsidized loans will continue to accrue interest when in deferment, even though you are not required to make any payments. This interest will be added to your principal balance for you to repay once you reenter a repayment period.
Forbearance is another alternative to refinance student loan for those who are struggling to make payments. You can temporarily reduce or postpone your student loan payments with forbearance. To do so, you must contact your lender and fill out a forbearance request form. Some lenders will require you to submit supporting documentation as well. Lenders can grant forbearance for up to a year at a time, and there is no limit to the amount of time you can spend in forbearance for economic hardship. As with deferment, your loans will continue to accrue interest while in a forbearance period. You might make interest-only payments with some forbearance agreements. Always consider refinance student loan before you apply for forbearance or deferment.
If you have any further questions vist our student loan FAQ page.
