Deferring Your Student Loans

by Isabella Craig on 2013/05/21

deferring student loans The cost of education has increased massively in the last few decades, which has resulted in more and more students going for education loans in order to pursue their studies.

However, the last few years has seen the growth in students deferring their loan payments due to several factors.

The 2008 global economic crisis has changed the entire outlook of the world, as more and more people have found it difficult to find employment.

This becomes especially true in the case of a student, who has just graduated. Thankfully, there are laws that help students to defer their loans for a certain period of time.

It is important to know that deferring loans is different from defaulting them. Basically, a student loan allows students to repay the loan only after they meet certain criteria, such as graduation or after a certain period of time. During this period, you only need to pay the interest of the loan. The principle remains as such and it can be paid at a later stage. This convenience depends on the terms agreed with the lender at the time of taking the loan.

This can be extremely easy due to the ability to defer the loan, and many people find they can pay off the interest from part-time jobs.

One of the ways to defer a student loan is by showing to the lender the proof of attending classes. The lender has the right to claim his money once he becomes aware that you are not attending classes anymore. In such a scenario, the lender may be coming for the full amount rather than for monthly repayments. A failure to pay the amount may count as a default, which can affect your credit score in a pretty bad way.

Students are usually offered a six-month grace period. I have even seen some lenders offering a nine-month grace period as well. This can help students pursue their educational objectives seriously with the knowledge that the lender is once again eligible for repayment after the end of the grace period.

It is quite feasible that lenders may not agree to defer a loan by just taking one class. There are several ways in which you can show the lender that you are eligible for deferment of the loan. You should either be enrolled in a graduate school or currently possess an internship.

It is possible to defer a loan on several accounts like physical disability, unemployment, financial hardships, or time served at the military.

Is there any reason why student loan deferment is not beneficial?

Courtesy of CreditCardShoppe.com

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