3 things to consider before doing a General Forbearance

General Forbearances are by far the most popular forbearances.  I personally believe it is because they are the easiest to get.  However before you go and put one on your account here are three things to consider instead that may be more beneficial.

Are there other lower payment options available?

This is especially true since with many Income Plans your payment can be as low as $0.00.  In many cases just because you can’t afford your current payment doesn’t mean you can’t afford any payment!

General Forbearances will not eliminate previous negative credit reporting

While General Forbearances can backdate to before your negative credit reporting, that does not mean it will fix this negative reporting.  Let’s say you don’t pay your payment for April 20, May 20, and June 20.  During this process you are negatively credit reported in June for being 60 days delinquent.  You call July 11th and do a forbearance.  This forbearance can be requested to date back to April 20, which is before your negative credit reporting happened in June.  However your credit reporting would still stand as it was accurate at the time of reporting.

Do remember there are certain instances such as In-School Deferments and Disaster Forbearances that do cover and correct negative reporting, but General does not apply in this situation.

You may end up having higher payments

Even if you aren’t making payments you are still expected to pay off your loan in your regular term (whether this be 10 years, 25 years, or another total).  As a result your payment may go up as it is necessary to make sure you still pay off your loan in the set amount time and don’t have a large balloon at the end.