We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Loan Deferral?

By G. Wiesen
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A loan deferral is basically a period of time in which a borrower is allowed to withhold loan payments. This is often allowed in a situation in which some type of unforeseen situation has made repayment difficult or impossible. While loans are not forgiven in deferral, it can allow a borrower breathing room to avoid default. A loan deferral is typically issued for a set period of time or for as long as a certain condition is met, depending on the terms of the deferment.

The overall purpose of a loan deferral is to allow a borrower to go a certain period of time without making payments on a loan. This can be issued for a wide range of reasons including illness or unemployment, and is often up to a lender to approve or refuse. For certain loans, however, such as student loans, there are typically certain conditions in which a loan deferral is always allowed. The first few months after graduation, for example, payment on a loan is typically deferred to allow the student to get out of school and find work.

There are typically certain conditions in which a loan deferral is issued to a borrower. Unemployment or economic hardship can be situations in which a borrower is not making sufficient funds to be able to pay back on a loan. Rather than pushing the borrower, a loaning agency can issue a deferment that allows the borrower to get into a better situation before making payments once again.

Student loans typically have a number of conditions in which students can receive a loan deferral. If a student begins taking classes again, usually half or full time, then he or she can be eligible for a deferral as long as the student is in school. Performing national service of some kind, such as military enlistment, can also be grounds for a loan deferral, though this depends on the lender.

A loan deferral is not intended to be permanent, however, and is often restricted to a certain period of time, such as up to one year. During this time, loans often continue to accrue interest, which means that once the deferment is over, the loan is typically larger than it was before. This can be offset by the potential for the borrower to be in a much more stable position in which to continue make payments on the loan.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.