Loan Deferment
What Is Loan Deferment?
Loan deferment is a temporary pause on the repayment of a loan. The length of time can vary from one month to several years, depending on the type of loan and the arrangement the lender offers. Although payments are paused, interest on the loan might continue to accrue. The repayment term is usually extended for the same time as the deferment period.
Deferment on a Loan vs. Forbearance?
So what is deferment on a loan, and how is it different from forbearance? The terms "deferment" and "forbearance" are often used interchangeably since they both refer to pauses in monthly loan payments. However, there are subtle differences between the two.
The main difference is that interest accrues when a loan is in federal forbearance, while interest can be paused in some deferment cases. When interest continues to pile up during deferment or forbearance, it means you will be paying more money over the life of the loan.
What Is Loan Deferment?
Loan deferment is a temporary pause on the repayment of a loan. The length of time can vary from one month to several years, depending on the type of loan and the arrangement the lender offers. Although payments are paused, interest on the loan might continue to accrue. The repayment term is usually extended for the same time as the deferment period.
Deferment on a Loan vs. Forbearance?
So what is deferment on a loan, and how is it different from forbearance? The terms "deferment" and "forbearance" are often used interchangeably since they both refer to pauses in monthly loan payments. However, there are subtle differences between the two.
The main difference is that interest accrues when a loan is in federal forbearance, while interest can be paused in some deferment cases. When interest continues to pile up during deferment or forbearance, it means you will be paying more money over the life of the loan.