How Does Forbearance Work for Student Loans?
Federal student loan servicers offer two types of forbearance: general (discretionary) and mandatory. General forbearance is granted at servicer discretion for financial hardship, illness, or employment change. Mandatory forbearance must be granted for specific circumstances like AmeriCorps service or medical or dental internship. Interest accrues during all forbearance periods, and unpaid interest may capitalize — be added to the principal — when forbearance ends.
What Is the Difference Between Forbearance and Deferment?
Both pause payments, but deferment is typically more favorable. On subsidized federal loans, the government covers the interest during deferment, so no new interest accrues. During forbearance, interest always accrues regardless of loan type. Deferment usually requires meeting specific eligibility criteria, while forbearance is more broadly available for general hardship. If you qualify for deferment, it is usually the better choice financially.
How Does Mortgage Forbearance Work?
Mortgage forbearance pauses or reduces payments for a defined period — typically three to twelve months — for borrowers experiencing hardship. Unlike student loan forbearance, mortgage servicers have differing repayment policies. Some require the total skipped payments as a lump sum at the end; others offer repayment plans or loan modifications. Contact your servicer as soon as hardship arises to understand your specific options before payments are missed.
Frequently asked questions
Does forbearance hurt your credit?
A properly processed forbearance agreement should not result in missed payment marks on your credit report — accounts in forbearance are typically reported as current. However, if forbearance is not formally agreed to and you simply stop paying, you will receive delinquency marks. Confirm the terms and reporting status with your lender in writing.
How long can forbearance last?
Duration varies by loan type and lender. Federal student loan forbearance is typically granted in periods up to 12 months with a maximum of three years. Mortgage forbearance is usually three to twelve months. Private lenders set their own terms. Extensions are sometimes available but must be requested before the current forbearance period expires.