Deferred student loans are appropriate when you need to postpone making a payment on one of your student loans. Most student loans whether federal or private come with deferment options that can allow you to push back your payments in six to twelve month increments. You’re typically limited in the amount of times you can utilize a particular deferment, and often times a lender will provide you with a set amount of deferments before they mandate that you resume making your payments.

The majority of student loans automatically come with an in-school deferment that prevents you from having to pay your student loan while your are still in school. This in-school deferment typically lasts until about six months after you have graduated or have left school full time. After you have left full-time enrollment or have graduated you are normally given a six-month grace period when you aren’t required to make your loan payment.

This grace period is similar to a deferment in that you don’t have to make any of your payments during this time. If during this grace period you realize that you probably won’t be able to make you scheduled payments then it is probably a good time to start applying for a real deferment.

If you can’t make your payments right after you graduate then you probably should contact your lender to see if you can apply for a deferment. Most deferments are approved based on the borrower’s extenuating circumstances, and you should plan on supplying the lender the appropriate reasoning behind the need for your deferment before you apply. The more common reasons for deferments include financial difficulties, going back to school, unemployment, and health issues. Most lenders will have no problem granting you a deferment as long as you can qualify for one of these, and the majority of lenders will simply require you to check off what the appropriate cause for your deferment is when you fill out your application.

Most federal student loans can be deferred for years before they have to be paid back, while private student loans can only be deferred for a fraction of the time a federal student loan can. It is important that you become aware of your lender’s policy in terms of their deferment allowance before you apply as this can vary significantly depending on the lender. For instance, I have some Sallie Mae private student loans that could be deferred for eighteen months post graduation, and I also had some other private student loans issued by a different lender. I figured that the deferment allowance would be on par with my Sallie Mae loans but I was terribly wrong because I wasn’t even entitled to any deferments with my other private student loan. This is why it is vital to understand your lender’s policy in terms of deferments especially with private student loan lenders.

Most people get deferments and forbearances confused and this is quite all right because the two are very similar. The major differentiating characteristic between these two is that the interest is capitalized with a forbearance while it only accumulates or is completely put on hold with a deferment. Both a deferment and a forbearance delay payments for a designated period, but with a forbearance you’ll typically have to pay more because of the capitalization. This is why you should always exercise you deferment options before you utilize your forbearance time with any particular student loans. In the end deferred student loans can provide the relief you need form your student loan payments and just make sure you know when you must resume making payments so that your loan doesn’t go into default.