Economic Hardship Deferment Q

[Multifidus]

For anyone who has used the Federal Economic Hardship Deferment,

On of the last options on the application:

"I wish to make interest payments on my unsubsidized loans during my deferment."

If you check this box, is there a minimum amount you need to pay? Can you later elect to not pay any interest at all? Basically, I want the option to pay some interest down during residency if I can afford...that's a big IF. Thanks.

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[edubbs5]

I would encourage you to contact your lender about this -I have heard that some lenders do not require these payments (even if checked) where others do. In my opinion, to be safe, left it empty and make payments if you have the funds available. Also - during a time of deferment - this allows you to focus attention on particular loans, vs. all of your portfolio - take this opportunity to pay down HIGH interest rate loans.

 

[johnstoner]

to come out ahead, I would suggest that you choose the "i will not make interest payments during deferrment" the reason why is b/c the interest is not capitalized until you start repayment. You would rather pay back the principle on loans during this time if you can and preferrably pay back your private loans which have the highest interest. Make sure that you defer on time because once you miss a deadline, theinterest gets capitalized. I have a general overall strategy that i've outlined in my blog, i hope that can help you. If you have any further questions, there are a lot of good advisors here...but ultimately, you have to talk to your lender to know the juicy specific details.

johnny

 

[mshheaddoc]

With federal loans I do not believe they can "make you pay interest" but that is with the major loan companies I have dealt with.

I suggest you take the strategy that johnstoner recommended. Click on "will not pay interest" and pay down if you so choose. You can still do it unofficially at no penalty to yourself.

 

[okbye]

Check with your lender though, some of them will not accept payments while you are in deferral.