What Is Private Student Loan Forbearance?

By Mike Brown Updated on May 7, 2019

If you’re struggling to make your student loan payments, you may have wondered if forbearance is a good idea.

While it’s true that forbearance can offer you some temporary relief from student loan payments, that relief can come at a significant cost—and can make paying off your student loans even harder. 

Let’s talk about what forbearance is, and if it’s the right option for you.

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What is private student loan forbearance?

Forbearance is the temporary relief from your obligation to make payments on a private student loan.

Sounds simple enough, right?

But there’s a little more to forbearance than meets the eye.

During forbearance, your regular loan payments are temporarily put on hold. However, this hold only pertains to the payment on the principal.

Interest will continue to accrue on your loan while it's in forbearance. Any unpaid interest will be added to the loan principal, which can significantly balloon the size of your loan.

As a result, you may face higher monthly payments at the end of your forbearance period.

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Requesting a private student loan forbearance

Private student loan lenders do not have to give you a forbearance. You’ll need to contact your lender to find out what options may be available to you.

If granted, some companies will allow a forbearance in three-month increments, while others may offer to put your loan on hold for much longer. Private lenders are unlikely to grant a forbearance of more than a few months.

If you’re interested in a forbearance on your private student loan, you will need to call your lender and explain your situation.

The pros and cons of private student loan forbearance

Before you say “yes” to the terms presented to you, it’s helpful to know some of the pros and cons of putting your student loan in forbearance.

The pros of forbearance:

  • It can help you make ends meet. If your monthly budget is stretched thin, getting a forbearance on private student loan payments may give you some temporary breathing room.
  • It doesn't directly have a negative impact on your credit score. While a forbearance is noted on your credit report, it doesn't count as a delinquency.
  • It can give you more time to replace lost income, allowing you time to find a better-paying job.

The cons of forbearance:

  • Forbearance eases your monthly budget in the short term but does increase the total amount you’ll repay. 

  • Your monthly payments could go up. 
  • The terms and fees associated with private student loan forbearance vary and may be less borrower-friendly terms than the federal loan forbearance option. If you are granted a forbearance on your private loans, you may have a variable interest rate. This can increase at any time and you’ll pay that higher rate on a principal you haven't been chipping away at.

What are alternatives to forbearance?

Rather than seeking a forbearance—which could end up costing you more in the long run—you might want to consider refinancing your private student loans.

Student loan refinancing is when you take out an entirely new loan to pay off your existing private student loans. Refinancing can help you lower monthly payments, reduce your interest rate, and get out of debt faster.

By swapping out your existing loan or loans for a new one with a lower interest rate, you’ll be able to direct more of your monthly payment towards your loan principal so you can pay down your debt faster.

Learning more about student loan refinancing 

The information in this article pertains to private student loan forbearance. Federal student loans will have different forbearance options. Learn more about federal student loan forbearance.

Published in: Student Loan Debt

About the Author
Mike Brown

Mike is responsible for the editorial and marketing direction of Nitro. He has a history of helping people through his educational background—first as a teacher at the Pennsylvania State University and then through 15 years of development and marketing of education programs. Read more by Mike Brown