7 Reasons Why Deferment is Important for Student Loan Borrowers

Student loan deferment allows qualified applicants to temporarily pause or reduce their monthly loan payments for up to three years. Here are 7 key points about student loan deferment:

1. Managing student loans involves an important aspect called student loan deferment. Let me explain why it is significant.
2. Deferment offers temporary relief by allowing you to pause or reduce your monthly student loan payments, which is particularly beneficial when facing financial difficulties or a lack of income.
3. By deferring your loans, you can avoid default, which occurs when you fail to make payments for an extended period and can have severe consequences for your credit score and financial stability.
4. During deferment, the balance of your loans does not grow excessively. For federally subsidized loans, no interest accrues as the government covers the interest payments. However, for unsubsidized loans, interest does accrue and is added to the total amount due after deferment.
5. Deferment serves as a short-term solution for temporary financial setbacks, providing a breather until you can resume payments. It is important to view deferment as a temporary measure.
6. To be eligible for deferment, you must apply and meet specific criteria. Your loan servicer or lender will process your application. While waiting for a decision, it is crucial to continue making timely payments to avoid default.
7. Remember that deferment is not loan cancellation; it is a temporary pause that can assist you in navigating financial challenges without negatively impacting your credit.