HELP!! student loan repayment question!

lukin55

my fiance wanted to defer making repayments for 6 months so we can free up some money for our wedding (in january), but she thinks it will screw up her credit, i dont think it will.....does anyone have any info on this? THANKS!!!!!!!

Shawn Smith Collective

Student loan deferrment will have no impact on the FICO scores. The loan holder will report that the loan is in deferrment and will remain marked as current. Some creditors still report the minimum payment, some do not, so if you look at a credit report, it may vary in that sense.

Also, just in case you're considering purchasing a home, most lenders will calculate the monthly liability for a deferred loan at 1.25%-1.50% of the balance (whereas they typically use 3.0% for credit cards and other loans that don't report a minimum payment).

riffrandall

Also is she aware that if her loan payments represent 20% or more of her monthly gross that she can defer for longer than six months?

know1

I would defer the wedding until you can pay cash for it....but that's just me.

(speaking as someone who's getting married in 4 days)

Shawn Smith Collective

Wait, I just thought of something.........Are you sure you're talking about a deferrment and not a forebearance?

You can typically only defer a student loan payment if you're currently registered for classes. However, if you "can't" make your payments, you can call and request a forebearance and your payments will be put on hold. It's similar to a deferrment, except that it's purpose is financial difficulty and would indicate that to potential creditors. You'd have no monthly obligation to the creditor during the forebearance period, but your interest would continue to accrue and will be tacked onto the principal balance. During deferrments, there is no interest accrued.

EDIT: Forebearance won't affect your FICO either.

kickoutthejams

pjny wrote:

Wait, I just thought of something.........Are you sure you're talking about a deferrment and not a forebearance?

You can typically only defer a student loan payment if you're currently registered for classes. However, if you "can't" make your payments, you can call and request a forebearance and your payments will be put on hold. It's similar to a deferrment, except that it's purpose is financial difficulty and would indicate that to potential creditors. You'd have no monthly obligation to the creditor during the forebearance period, but your interest would continue to accrue and will be tacked onto the principal balance. During deferrments, there is no interest accrued.

EDIT: Forebearance won't affect your FICO either.

No, actually if you have just graduated they give you a 6 month deferment, after that point you can request a forebearance at any time if circumstances dictate. Trust me I have $90K in student loans. Niether one have a negative impact on credit scores.

Also depending on the amount and sources of her student loans you should probably consolidate, if there are multipls sources of funding, different types of loans etc...feel free to pm me if you want me to go into more detail

inmytree

know1 wrote:

I would defer the wedding until you can pay cash for it....but that's just me.

(speaking as someone who's getting married in 4 days)

congrats!!!

know1

inmytree wrote:

congrats!!!

Thanks!