What is the difference between a loan deferment and a loan forbearance?

A loan deferment and a loan forbearance are two different ways for students in Pennsylvania to postpone or reduce their student loan payments. Both are designed to help students who are facing financial difficulties, but they are two different options. A loan deferment is a period of time when you do not have to make payments on your student loans. During the deferment period, you are not responsible for the interest that accrues on your loan. Most loan deferment periods are limited and will end after a set amount of time, or when certain criteria are met, such as when the borrower returns to school. A loan forbearance is a period of time when the loan holder agrees to reduce or suspend your payments. During this period, the loan holder may still charge interest and you will still owe the principal plus the accrued interest at the end of the forbearance period. However, some lenders may reduce or suspend interest during the forbearance period. In summary, a loan deferment allows you to postpone your loan payments for a set period of time without having to worry about the interest, while a loan forbearance provides a temporary reduction or suspension of payments, but the interest may still be charged. It is important to understand the conditions of each option before making a decision.

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What is the difference between a loan deferment and a loan forbearance?

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