How to Defer Your Private Student Loans

Private student loan deferment offers a temporary pause in required loan payments. This can provide financial relief when making regular payments becomes challenging. Unlike federal student loans with standardized terms, private loan deferment policies are set by individual lenders and differ substantially. It is important for borrowers to understand these specific lender policies.

Qualifying for Private Student Loan Deferment

Private student loan deferment eligibility depends on the specific lender and loan agreement terms. While common deferment categories exist, a private lender’s willingness to grant deferment and its conditions are not uniform. Borrowers should consult their loan servicer to determine available options.

One common reason for deferment is continued enrollment in an eligible educational program. Many private lenders offer in-school deferment, allowing borrowers to postpone payments while enrolled at least half-time. Some private loans may offer deferred payments until six months after graduation or if enrollment drops below half-time. Interest typically continues to accrue on private loans during this period, unlike some federal loans.

Economic hardship or unemployment can also be grounds for deferment, often at the lender’s discretion. Borrowers experiencing significant income reduction, job loss, or other financial difficulties might qualify for a temporary payment pause. Lenders may require documentation to demonstrate the financial situation, such as unemployment benefits or proof of income changes. Military service deferment is another possibility for borrowers on active duty. Private loan terms for military deferment can vary and may not be as comprehensive as federal loans.

Preparing Your Deferment Application

Before contacting your private student loan lender, gather all necessary information and documentation. You will need your loan account number, personal identification details like your full name, current address, and Social Security Number. Your contact information, including phone number and email, will streamline the process.

The specific supporting documents required depend on your deferment request reason. For in-school deferment, lenders require enrollment verification from your educational institution, often obtained from the registrar’s office. This confirms your enrollment status, including if you are attending at least half-time. If seeking deferment due to unemployment, provide copies of unemployment benefits or a letter from your state’s unemployment agency.

For economic hardship deferment, lenders ask for proof of income reduction or financial distress. This could include recent pay stubs, tax returns, or an employer letter detailing reduced hours or employment termination. For military service, official military orders or a commanding officer’s letter may be necessary. It is advisable to obtain these documents in advance, as some may take time to acquire from the respective sources.

Submitting Your Deferment Request

Once all required information and supporting documents are prepared, submit your deferment request to your private student loan servicer. Lenders offer several submission methods: online portals, mail, fax, or phone.

If using an online portal, log into your loan account, navigate to the deferment or hardship assistance section, and follow prompts to upload your application and supporting documents. For mail, ensure all forms are signed and legible before sending the complete package to the lender’s specified mailing address. Sending via certified mail with a return receipt requested provides proof of delivery. If faxing, confirm the correct fax number and retain the transmission confirmation report.

Regardless of the submission method, keep copies of all submitted materials for your records. If an online portal provides a confirmation number, note it. If communicating by phone, document the date, time, and the representative’s name. These records can be important for tracking your application status and for future reference.

Managing Your Loan During and After Deferment

Upon submitting your deferment application, await official confirmation from your lender. This confirmation outlines the approved deferment period and terms, including whether interest will continue to accrue. While deferment pauses monthly payments, interest generally accumulates on private student loans, increasing your overall loan balance.

During deferment, monitor your loan account online to track interest accrual and ensure proper application. Even with paused payments, consider making interest-only payments if financially feasible to prevent the loan balance from growing. If your financial circumstances change or you anticipate needing further assistance, proactively contact your lender to discuss new options.

As the deferment period ends, your lender will notify you of upcoming payment resumption. Understand that accrued and unpaid interest may be capitalized, added to your principal balance. This can result in higher future monthly payments and a greater total cost over the loan’s life. Re-evaluate your financial situation and repayment strategy before payments resume. If you foresee continued difficulty, contact your lender to explore alternative repayment plans or further options.