What Do I Need to Do to My Bank Account to Defer a School Loan?

Deferring a student loan allows you to free up the money you would normally make on your student loan so you can use it for something else. Many people defer student loans when they lose a job or face a hardship such as a serious illness. Federal student loans allow you to go into deferment, while private student loans may be more reluctant to do so. There are a limited number of months for which you can put your loan on deferment.

Putting Your Loan on Deferment

Contact your lender to apply for deferment. You do need to have qualifying circumstances to put your loan on deferment. This usually involves some form of economic hardship, such as a job loss or a low income. The lender may require that you send in proof of your situation for you to qualify. Do not stop making payments until you have received notice that your deferment is approved. Generally the deferment is for a set amount of time and it should include the date you need to start making payments again.

Bank Accounts and Deferment

If you have an automatic student loan payment coming out of your banking account, you will need to monitor your bank account to make sure that the payment does not go through each month. The lender should stop taking payments. If the lender continues to withdraw payments, you can put a stop on any automatic withdrawals from them at your bank. However, once you begin making payments again you may run into a problem with the payments going through. Another option is to close your account. Be sure you do not do these things until you have received notice that your deferral has been approved.

Stopping Automatic Payments

You can contact your lender and cancel your automatic payment option at the same time you apply for a deferment. Some lenders allow you to do this online or over the phone. This should prevent automatic payments from starting at the wrong time while your loan is on deferment, but it may take a month for the lender to process the cancellation. You will need to monitor your account to make sure the cancellation has gone through.

Manual Payments

If you make payments manually by check or transferring them yourself, you do not need to worry about the lender debiting the money from the account. Once you have received notice of deferment approval, you simply stop making payments until the deferment expires. If you have chosen to continue paying interest on the loans, you will need to send in the smaller interest payment during that time.