Each forbearance period lasts for three months. You can re-apply to extend this in three-month increments, up to 12 months in aggregate over the life of the loan.
During the forbearance period, interest will continue to accrue. Unpaid interest will be capitalized (added) to your principal balance at the end of each three-month forbearance period. For student loans, we recommend making interest-only payments during this time in order to prevent the interest from being capitalized to the loan principal, if you’re able.
For student loans, forbearance does not extend the loan repayment term.
-If interest-only payments are made during the forbearance period, the amount of the principal balance will not increase. Monthly loan payments will increase due to the same loan amount needing to be paid over the same repayment term.
-If no payments are made during the forbearance period, the amount of the principal balance will increase. The increase to monthly payments will be more significant than if interest payments were made during the forbearance period.
For personal loans, forbearance does extend the loan repayment term.
-Unpaid interest will increase the principal balance, and will increase the monthly payment.