Myth: Only Federal Loans Have Forbearance Options

Flickr user Darren Hester

A lot has been written about forbearance options being one of the many benefits of federal student loans but what is generally overlooked is the fact that some private lenders also offer borrowers this option.

Forbearance Options

Forbearance allows you to postpone your monthly payments temporarily for a fixed period of time. This can come as a huge relief to if you encounter some type of financial hardship that makes it impossible for you to continue making your monthly payments.

With federal student loans, forbearance is generally granted for up to 12 months. During the forbearance period, any interest that accrues on your subsidized student loans and Federal Perkins Loans are paid off by the government. However you are responsible for paying off all interest that accrues on any of your unsubsidized loans.

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Federal vs Private Loan Forbearance

The difference between federal and private loans is that the forbearance benefits are not standardized. Moreover, not all private lenders offer this option. If you find you just cannot make your monthly payments, it is worth checking with your lender about the forbearance or any other postponement options available. Some lenders also offer partial forbearance options where you make interest-only payments to ease your financial distress.

It is important to keep in mind that forbearance is not an option that you should choose lightly. Although it helps postpone your payments, the interest keeps accruing during the forbearance period, so you end up paying much more by way of interest over the life of your loan.

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Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.74% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.89% - 5.90%*
Fixed APR: 2.50% - 6.00%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.98% - 7.04%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 6.22%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 6.52%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.79%*
Fixed APR: 2.99% - 4.89%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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