Finance Loan

How To Defer Student Loan Payments

Published at 02/06/2012 20:13:50


There is trend in many developed countries to provide reasonable and convenient financial services for students as. Various financial institutions, especially banks, offer numerous credit facilities for the students so that they can continue their studies without any difficulty. These financial services include the facility of student loan. These loan offerings are usually accompanied by a lower interest rate with easy installment payments so that student can easily repay it on time without any difficulty. However, for those students who are not being able to make installments for some specific time period, due to any genuine problem, there is a flexibility included by the regulation i.e. deferring a student loan payments.

Step 1

Deferring a student loan payment provides an opportunity to a student to postpone his/her periodic installments for specific duration ,when he/she is not in a condition to pay. All the students who have taken a student loan, have been granted a right to apply for deferring loan payments or installments at least for once during repayment phase. But at the same time, the law require students to satisfy certain criteria to avail this right. There are different types of deferment criteria available and each one varies according the type of student loan the student has borrowed. Student needs to understand the effectiveness of deferment period and the requirements that need to be completed for deferring a student loan. For example, one of the requirements includes that student must be registered minimum half time in an appropriate institution and he/she must be able to have enrollment certification by the school to apply for deferring a loan.

Step 2

Then student can write a student loan deferment request to his/ her creditor or lender. The lender usually requires the completion of some documentation that include the proof of your financial hardship and your inability to pay for some time. The processing and approval of deferment request usually takes at least two weeks, however, if you don’t get any response within that period, you can interact with loan representative to get the details. Sometimes, the process gets delayed due to insufficient documentation, therefore, be sure to make proper documentation completely.


Meanwhile, you have to decide that paying terms and condition by analyzing your existing financial condition. A student has usually two options to repay the student loan. He/she can either pay the interest payment on loan every month or pay the entire interest with the principal loan amount. Normally, students go for the first option, as it is less costly than the other one because interest installments get increased with higher loan’s balance. For choosing the most appropriate solution here, will require how efficiently you review and evaluate your financial situation. Lastly, it is mandatory for you to keep the entire record of documentations, your student loan details, deferment contract, its terms and conditions etc, even after the end of deferment phase. It is not only required by law, but it will also help you to remove any misunderstandings that may arise in future.