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
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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.
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