4 Tips to Manage Student Loan Payments during Unemployment

Here are a few tips to manage student loan payments during unemployment. 

1. Talk to the Lender

Many unemployed people tend to keep everything to themselves. They do not want to call their creditors to alert them of the situation. While there will be some repercussions in most cases, the blow that you will have to bear will be a little softer if you communicate with the lender. When you lose your job and it becomes clear that you will not be able to find another one immediately, you need to call your student loan lender, explain your situation and ask about your options. They may be able to offer some sort of help for you. 

2. Deferment

One option that you may be able to use is a deferment. A deferment is when you can postpone the payments and interest that are due on a monthly basis. Typically, lenders will allow you to defer a certain number of times when you have a student loan. This can be a very helpful option. It could allow you to put your loan on hold for as long as a year. 

3. Forbearance

Another, similar option is a forbearance. In order to qualify for a forbearance, usually something negative has to happen outside of your control. Typically, losing your job would qualify you for this type of program. During this program, you will not be responsible for your monthly payments or the interest associated with them. However, the interest will continue to accrue on the account. Therefore, the longer you leave your loan in this state, the higher your loan balance is going to be when you resume your normal payments. 

4. Other Payment Options

Most student loan lenders are very flexible with their payment arrangements. For example, most of them offer a graduated payment plan and an income-based plan. With the graduated payment plan, you can start out with a lower payment early on in the life of the loan. As time goes by, your payment will increase. Therefore, if you have not had your loan longer than a certain period of time, you may be able to qualify for this program.

With the income-based program, the lender calculates how much the payment should be based upon your income. When you are making a higher income, the payment will be correspondingly high. When your income decreases, the payment will as well. Therefore, with this type of payment arrangement, you may be able to get a break when you do not have a job. There may be other payment arrangements that you could set up as well. Just talk to your specific lender to see what they have to offer.