If you’re stuck with a bundle of private student loan debt, there are not many options for lessening the burden. There are, however, a few things you can do if you simply check with your lender and request information how you can defer private student loans, or perhaps even get a forbearance depending on your loan terms.
In fact, this is a good time to point out that private student loan debt is the absolute worst debt you can possibly acquire. Private lenders are no under federal student loan program so they do not have to operate with the generous deterrent and forbearance programs allotted to federal student loan borrowers. Your private lender will not care about your financial hardship or job loss, you still owe the money just like a car loan or a credit card.
The good news: Yes, you can defer private student loans. Sometimes this takes on various forms, but there are ways you can reduce your payment or temporarily stop making payments altogether.
This may be the most obvious way to defer your payments and frankly, this is probably the least useful since this doesn’t apply to most people who are now out of school and paying back their loans. Yes, if you’re in school for more classes or anything else, you can submit this information to your private lender and they will usually offer deferments while you’re in school.
Unemployment Deferment and Economic Hardship
Some lenders, for example, may offer six month increments of this type of forbearance for a maximum of 12 months. This can be a excellent tool while you’re trying to build up income or seeking higher-paying job. The only catch is that once you’ve used this up, you’re done with it unless you go back to school or are actively deployed in the military. There is a limit on this type of deferment and most private lenders are very strict with these policies.
If you are in a situation where you cannot get a deferment or forbearance on your private student loans, the next best option may be a change in your repayment terms to give you some lower payments.
Some lenders offer the opportunity to begin making 25% of your full payment for nine months, then it bumps up to 50% of the payment for six months, then a little more and so on. The full income-sensitive graduated payment plan takes a couple years to bump you up to full payments but will give you some time to continue getting on a strong financial footing. This type of relief can cut your payment down to a fraction which frees up monthly income, at least temporarily.
This will likely require a phone call to your lender since many of these options are not well-documented on their websites nor can you make this type of change online.
The Bottom Line
When making any changes to your loan repayment or postponing payments, ask lots of questions and make sure you understand how much interest will be accruing on your loans while you take these payment modification options. Also make sure your loan is current as lenders will not usually offer any payment changes to borrowers who are past due.
Call your lender and see what they can do, you might be surprised. They might have options you didn’t even know about. If you get a decent customer service representative, they will work with you and explore the option available to defer private student loans.