Why is My Student Loan in Forbearance?
Your student loan is in forbearance due to financial hardship, offering temporary payment relief for up to 12 months, preserving credit but accruing interest.
by Sai V
Published Oct 30, 2023 | Updated Oct 30, 2023 | ๐ 1 min read
Article continues below advertisement
Why is My Student Loan in Forbearance?
Student loans enter forbearance in response to financial hardship, granting temporary payment relief, usually for up to 12 months. It's a short-term solution, preventing default and preserving your credit score.
However, interest continues to accrue during this period, potentially increasing the overall repayment amount. Exploring long-term alternatives like deferment or income-driven plans is advisable to manage your loan effectively. Consulting your loan servicer for personalized advice is essential.
What is Forbearance?
Forbearance is a temporary pause in loan payments, often applied to mortgages or student loans. It offers relief for borrowers facing financial hardship, such as illness or job loss. Lenders grant forbearance to prevent defaults or foreclosures, allowing borrowers to temporarily stop payments. Terms are negotiated between the borrower and lender.
Related Articles
Quiz Questions On Insurance and Risk Management - 3
740 days ago
Quiz Questions on Credit Management and Awareness
741 days ago
Disclaimer : The above information is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.