Deferment Vs Forbearance
So let's say you're in a bit of a bind with your current loans.
You’ve exhausted all other options, and you’re still short the required payment amount. Maybe it’s taking too much of a toll meeting these requirements on a monthly basis. Luckily, you aren’t out of options yet. For example, you can request a loan deferment.
This allows you to suspend the monthly payments for your loan for an agreed upon period of time. From here, you can see some flexibility and a reprieve on your previous financial demands. It’s a temporary fix, but it can allow you to pull your head above water long enough to get yourself in a better position.
The Difference is in The Interest
You can also apply for a loan forbearance. This is when your loan agent reduces the amount of your minimum payment, possibly even to the point of having to pay nothing. Like the previous option, this is also temporary. So what’s the main difference between the two? Under a deferment, there’s a chance that you won’t be assessed any interest while your payments are suspended. These also usually come with a longer suspension term.
On the other hand, forbearance means that the interest of your unpaid amount still builds on the final payback amount. In short, you get a break for the moment, but you’ll end up paying more in the long run. Also, the forbearance is usually more of a short term plan. Either way, you’ll want to approach both with caution, and only undertake them after you understand all of their ins and outs.
Why To Choose Affinity Bank
Looking for help securing a home loan? Look no further. Affinity Bank is here to help you get the best deal for your worth. You can schedule a consultation with us via our contact page today to learn more.