| Loan deferment is a special financing alternative that | | | | for in-school deferment. This option is sometimes |
| lets borrowers skip a payment without receiving | | | | available to post graduates who have entered into |
| derogatory credit reporting. The option to defer | | | | college loan consolidation. In-school deferment is only |
| payments is available for most types of loans including | | | | available to students enrolled in or graduated from |
| mortgage, auto, credit cards, and student loans. | | | | accredited schools and cannot be used for online |
| Debtors must obtain lender approval and abide by | | | | education tuition. |
| deferment policies. | | | | It is important to note that some banks do report |
| The loan deferment process involves contacting the | | | | deferred payments as delinquent. Therefore, it is |
| lender, submitting a deferment application, and | | | | crucial to ask lenders how they report to credit |
| undergoing the application process. The actual process | | | | bureaus before entering into a contract. Payments |
| can vary by lender. Other factors taken into account | | | | reported as past due can reduce FICO scores. |
| include the borrower's credit history, type of loan, and | | | | Depending on credit scores, a reduction of ten points |
| number of payments being deferred. Approval can | | | | can place debtors in a lower credit category; making it |
| take less than 24 hours to several weeks. | | | | difficult to obtain credit in the future. |
| Borrowers should create a folder to store loan | | | | It is best to obtain a real estate forbearance |
| document records, along with a record of phone and | | | | agreement when deferring mortgage payments. |
| email correspondence. Always keep track of phone | | | | Forbearance agreements prohibit lenders from |
| conversations by writing down a summary of the call, | | | | commencing with foreclosure action unless borrowers' |
| date, time, and name of the bank representative | | | | default on the contract. This is of particular importance |
| spoken with. When important documents are mailed, | | | | when obtaining mortgage deferment to prevent |
| invest in the extra protection of tracking receipts. | | | | foreclosure. |
| Certified letters should be sent with a return receipt | | | | Always obtain loan agreements in writing and read the |
| request in case it is necessary to provide evidence the | | | | fine print. One of the biggest mistakes borrowers |
| documents were received. | | | | make is entering into verbal agreements. If things go |
| Deferred payments are usually placed at the end of | | | | wrong there is no evidence to prove the case. |
| the loan and payment terms extended. The type of | | | | Debtors should know the number of deferred |
| loan is a contributing factor as to how many payments | | | | payments, payment schedule, fees or penalties, and |
| can be skipped. On average, lenders allow borrowers | | | | how the lender reports suspended payments to credit |
| two to three months to resolve financial setbacks. | | | | bureaus. |
| Lenders may require borrowers to submit a financial | | | | Loan deferment can help borrowers get back on their |
| letter of hardship which explains the circumstances | | | | feet, but can sometimes include credit blemishes. Take |
| causing them to require a loan deferment. Hardship | | | | time to understand the advantages and disadvantages; |
| letters are usually required with federal student loans | | | | obtain the contract in writing; and adhere to the terms |
| and real estate transactions such as loan modifications. | | | | to ensure a successful outcome. |
| Students attending college at least half-time can apply | | | | |