Thank you for responding, Hunting_Bears!!
Okay, I have never been the sharpest knife in the drawer ... so I really don't think I understand.
However, this is what the ACS website says about forbearances and the cons:
Forbearance for Financial Hardship
The forbearance for financial hardship is an option for the borrower who is willing but unable to make payments. Unlike a deferment, the forbearance is not a right and is granted at the discretion of the lender. Most lenders offer 24 to 36 months of forbearance over the life of a loan. Here are some things to keep in mind about forbearances:
* As with all forbearances, you are responsible for any accrued interest and are given the opportunity to pay the interest via quarterly statements.
* Any unpaid interest at the end of your forbearance will be added (capitalized) to the balance of your account.
* Since the capitalization of interest increases the balance of your loan, your monthly installment may also increase to allow repayment of your loan within the term specified by your promissory note.
* You will be disclosed of the revised terms of your loan after any interest is added to the balance of your loan(s).
A forbearance will not remove any prior derogatory credit history. If the forbearance does fit your situation, be sure to have the form processed prior to any such reporting. Try to use the forbearance as a final option for extending repayment. It is always in your best interest to review your deferment eligibility and repayment options before requesting forbearance.
Forbearances are granted for a maximum 12 months including any periods of delinquency.
Is that agreeing with the definition you found?? I really can't make head nor tails out of ANY of it!!!!
Okay, I have never been the sharpest knife in the drawer ... so I really don't think I understand.
However, this is what the ACS website says about forbearances and the cons:
Forbearance for Financial Hardship
The forbearance for financial hardship is an option for the borrower who is willing but unable to make payments. Unlike a deferment, the forbearance is not a right and is granted at the discretion of the lender. Most lenders offer 24 to 36 months of forbearance over the life of a loan. Here are some things to keep in mind about forbearances:
* As with all forbearances, you are responsible for any accrued interest and are given the opportunity to pay the interest via quarterly statements.
* Any unpaid interest at the end of your forbearance will be added (capitalized) to the balance of your account.
* Since the capitalization of interest increases the balance of your loan, your monthly installment may also increase to allow repayment of your loan within the term specified by your promissory note.
* You will be disclosed of the revised terms of your loan after any interest is added to the balance of your loan(s).
A forbearance will not remove any prior derogatory credit history. If the forbearance does fit your situation, be sure to have the form processed prior to any such reporting. Try to use the forbearance as a final option for extending repayment. It is always in your best interest to review your deferment eligibility and repayment options before requesting forbearance.
Forbearances are granted for a maximum 12 months including any periods of delinquency.
Is that agreeing with the definition you found?? I really can't make head nor tails out of ANY of it!!!!
Wonderin wrote:
Thank you for responding, Hunting_Bears!!
Okay, I have never been the sharpest knife in the drawer ... so I really don't think I understand.
However, this is what the ACS website says about forbearances and the cons:
Forbearance for Financial Hardship
The forbearance for financial hardship is an option for the borrower who is willing but unable to make payments. Unlike a deferment, the forbearance is not a right and is granted at the discretion of the lender. Most lenders offer 24 to 36 months of forbearance over the life of a loan. Here are some things to keep in mind about forbearances:
* As with all forbearances, you are responsible for any accrued interest and are given the opportunity to pay the interest via quarterly statements.
* Any unpaid interest at the end of your forbearance will be added (capitalized) to the balance of your account.
* Since the capitalization of interest increases the balance of your loan, your monthly installment may also increase to allow repayment of your loan within the term specified by your promissory note.
* You will be disclosed of the revised terms of your loan after any interest is added to the balance of your loan(s).
A forbearance will not remove any prior derogatory credit history. If the forbearance does fit your situation, be sure to have the form processed prior to any such reporting. Try to use the forbearance as a final option for extending repayment. It is always in your best interest to review your deferment eligibility and repayment options before requesting forbearance.
Forbearances are granted for a maximum 12 months including any periods of delinquency.
Is that agreeing with the definition you found?? I really can't make head nor tails out of ANY of it!!!!
Yes, both statements agree. What each are saying is that when you were in forbearance the loan company took the interest that you would have paid with each payment and added it to the loan. So when it came time to start paying the loan again your balance was bigger than before, not only because you didn't pay the monthly payments but because of the interest added to the balance. When you got into forbearance or deferment (and I'm currently in deferment with my loans) it's best that you pay the interest so it won't capitalize and increase the balance due (but I haven't so don't feel bad that you didn't).