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Difference between Forbearance and Deferment

Difference between Forbearance and Deferment

There are two ways to postpone student loan payments: forbearance and deferment. Both have their pros and cons, but it’s important to understand the difference before you make a decision. In this blog post, we’ll break down the difference between forbearance and deferment so you can choose the right option for you.

What is Forbearance?

A forbearance is an act of mercy or leniency in which a creditor agrees to postpone or reduce the payments on a debt. The purpose of forbearance is to provide a temporary reprieve for the debtor, who may be experiencing financial hardship. Forbearance is typically granted at the request of the debtor, and it is important to note that interests still accrue during this period. Forbearance is not a forgiveness of the debt, and the debtor is still obligated to repay the full amount owed. However, it can provide much-needed relief during difficult times. Forbearance should not be confused with deferment, which similarly postpones payments but does not accrue interest during that period.

What is Deferment?

Deferment is the process of postponing a payment or obligation. Deferments are often used in the context of loans when a borrower is unable to make their regular payments. In this case, the lender may agree to defer the loan for a certain period of time. Deferments can also be used for other types of obligations, such as tax payments or court appearances. In most cases, deferments are granted on a case-by-case basis and must be approved by the party to whom the payment is owed.

However, some deferments, such as those for federal student loans, are automatic and do not require approval. Deferment can provide temporary relief for borrowers who are facing financial hardship, but it is important to note that interest will continue to accrue during the deferment period. As a result, deferment should only be used as a last resort after all other options have been exhausted.

Difference between Forbearance and Deferment

Forbearance and deferment are both options for temporarily postponing student loan payments. Forbearances are granted at the discretion of the lender, while deferments are available for certain types of loans under specific circumstances. One key difference between forbearance and deferment is that interest continues to accrue during a forbearance, while it is postponed during a deferment. Forbearances are typically granted for shorter periods of time than deferments, and they may be requested more often. As a result, borrowers should carefully consider their options before requesting either type of relief.


The main difference between forbearance and deferment is that forbearance usually doesn’t have any interest charges, while deferment does. In addition, the government may pay the interest on your loans during periods of forbearance, but not during periods of deferment. If you are having trouble making loan payments, it’s important to understand the differences between these two options and choose the one that will be best for you.

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