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How Personal Loan Deferment Works & How It Can Help You – Forbes Advisor



Sometimes it can feel like your back is against a wall if you can’t pay your bills. If you have a personal loan, your monthly payment might seem overwhelming, especially if you run into financial trouble. The most important thing to know is that you always have options, even if it doesn’t seem like it. If your lender allows it, a personal loan deferment is one of the best options because it allows you to temporarily stop making payments while you get back on your feet.

Personal loan deferment has its limits, though, so it’s important to understand how it works so you can use it without getting into deeper trouble.

What Is Personal Loan Deferment?

Deferment is a pre-approved, temporary break from making payments on a debt you owe, including personal loans.

To get a deferment you’ll first need to speak with your lender and explain your situation, whether it’s that you lost your job, your hours at work were reduced, you were impacted by a national emergency or you need expensive medical care. Lenders typically reserve deferments for people who are undergoing some sort of financial hardship.

And, while lenders aren’t generally required to offer deferment on personal loans, most are still willing to work with you. From a profit standpoint, it’s cheaper for them to pre-approve a borrower for a temporary break in payments than to start collections proceedings, after all.

How Deferring a Payment Works

When you defer a payment, you’re agreeing to put off that payment until a later date. For example, if you get a one-month deferment and you were originally scheduled to pay off your loan in November 2021, you’d now be paying it off in December 2021 (assuming you don’t have any more payments deferred).

If a lender agrees to defer your payments, it’s really important that you understand their rules. Specifically, you need to know when your deferment officially starts and when it ends. These two dates are important to know because you’ll be expected to make any regular payments outside of the deferment period. Lenders often only grant deferments in one-month intervals, but they may be longer.

If your next payment is due on Oct. 1 and your deferment was approved starting on Oct. 2, you’ll still need to make a payment in October, for example.

A borrower who is still having financial problems at the end of their deferment period can contact their lender to request another deferment. Some lenders have limits on the number of times a borrower can ask for deferment, while others go on a case-by-case basis. If your lender only grants deferments in one-month intervals, for example, you’ll need to contact them every month until you’re either able to make payments again or find another solution.

Will I Be Charged Interest During a Deferment?

Generally, if your lender does approve you for a deferment, interest will still accrue on the loan. So while you do get a break from making a payment, it’s not free—you’ll just have to pay for it later, in the form of interest.

You can get some idea of what this charge might be by reviewing your most recent statement. Your payment will be broken down into a principal portion and an interest portion. You can think of that interest charge as the cost of the deferral. It’ll just be tacked onto your loan, and you’ll have to pay it back later when you start making payments again.

In some cases, lenders are more lenient and won’t charge you interest—such as if there’s a natural disaster, a global pandemic or some other factor that’s affecting a wide range of people and is outside their individual control. But again, this leniency isn’t required, and individual lenders have their own rules about whether to charge interest in different situations.

Does Deferring Loans Affect Your Credit?

If your lender has approved you for a personal loan deferment, your credit shouldn’t be harmed.

Normally, each month your lender reports your payment to the credit bureaus as paid on time, paid late or delinquent. In general, if you pay late (or not at all) your credit will be harmed. But in the case of a deferred payment, they’ll instead report it as deferred. This means that they agreed not to take payment for that month so the missed payment won’t hurt your credit score.

Even so, you’ll need to keep in mind when your deferment ends. If you miss a payment after the deferment ends or forget to apply for another deferment, you’ll likely have to pay a late fee and will see a ding on your credit score.

What to Do if You Can’t Pay Your Loans Due to Covid-19

If you’re having trouble making your payments due to the Covid-19 pandemic, you’re far from alone. According to a June 2020 TransUnion study, roughly 7% of outstanding personal loan accounts are being paid back by someone experiencing financial hardship. That’s 27 times the amount of people who were having trouble paying back their loan in the same month of the previous year—before Covid-19 existed.

The good news is that many personal loan lenders—especially the larger ones—have publicly announced policies that provide relief in the wake of Covid-19. As usual, available options depend on your lender. But at least now we’re seeing that many lenders are offering extended periods of interest-free deferment, similar to the government’s handling of federal student loans. These are new policies, however, so you should still consider other alternatives to deferment.

Personal Loan Deferment Alternatives

Loan deferment is a great option if your lender offers it—but it’s not your only option. Here are some other things you can do if your lender doesn’t offer deferment, or if you’d rather try something else:

Ask Your Lender for a Modified Payment Plan

Technically speaking, a deferment is a modification of your payment plan. But if your financial setback is permanent and not just temporary, a better option might be to ask your lender to extend your loan’s term length. This stretches your payments out over a longer period of time. And while it can be more expensive in the long run, it also makes your monthly payments smaller and easier to work into your budget.

Refinance Your Loan

If your lender isn’t willing to change your payment plan, another option is to take your business to another lender entirely by refinancing your personal loan. It may even be possible to get a lower interest rate while you’re at it. Keep in mind, however, that you may need a good or excellent credit score to qualify for better terms.

Speak With a Credit Counselor

If you know you can’t make your payments now and your lender isn’t willing to work with you, consider speaking with a credit counselor. A counselor also can be helpful if you’re not sure whether deferment is the best option for you—or if an alternative is the better fit. Just make sure you’re careful here, because there are a lot of credit repair scams that have even been the target of legal action from the Consumer Financial Protection Bureau.

To avoid fraudulent credit counselors, we recommend getting a referral through the National Foundation for Credit Counseling, a nonprofit organization that provides affordable or even free financial assistance for people with financial difficulties.

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Nearly 1 in 3 Americans Struggle to Fill Out FAFSA, Survey Finds



FORT LAUDERDALE, Fla., June 22, 2021 /PRNewswire/ — A new survey reveals that almost one in three Americans who fill out the Free Application for Federal Student Aid (FAFSA) struggle doing so. 

The biggest challenge, 44 percent said, was not knowing all the financial information FAFSA asked for. The second-biggest challenge was not having any help filling it out, 28 percent said. 

The majority of student loans are federal loans, which means filling out FAFSA is how most students can afford college. chairman and CPA Howard Dvorkin says because FAFSA is so important, you should go into it prepared. With the FAFSA deadline on June 30, that should be sooner than later.

“FAFSA doesn’t just offer you loans, it offers you grants and other amounts you don’t have to pay back,” Dvorkin says. “If you go into it without all the information you need, you could be leaving free money on the table.” 

Some of the other findings include: 

  • 89 percent said they thought their child or themselves qualified for financial aid, but only 68 percent actually qualified.
  • Other challenges people faced while filling out FAFSA were receiving an error message (18 percent), not creating an FSA ID beforehand (7 percent) and not knowing the deadline (3 percent).
  • 34 percent said they felt the Pell grant would involve taking on more debt.

One in three people struggling to fill out FAFSA is too many, Dvorkin says. “FAFSA is too important to leave until the last minute or not use any resources for help,” he says. “Fill it out early so you can identify the issues you’re having and solve them quickly. You might end up in even more debt if you don’t.”

ABOUT: is the consumer website where people can find help with credit card debt, student loan debt, tax debt, credit repair, bankruptcy, and more. works with vetted and certified providers that give the best advice and solutions for consumers ‘when life happens.’


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Deceiving Discount Insurance Plans, Credit Repair Scams – The Bee -The buzz in Bullhead City – Lake Havasu City – Kingman – Arizona – California



Attorney General Ford Warns Nevadans About
Deceiving Discount Insurance Plans, Credit Repair Scams

Carson City, NV – Today, Nevada Attorney General Aaron D. Ford, in partnership with the Nevada Division of Insurance, encouraged Nevadans to stay vigilant as scammers attempt to take advantage of struggling individuals and businesses during the COVID-19 pandemic. Examples of the latest pandemic scams include the deceptive discount insurance plans and credit repair scams.

Deceptive Discount Insurance Plans:

With the American Rescue Plan Act, Nevadans have through August 15th, 2021 to enroll in or change their health plans in the Health Insurance Marketplace known as Nevada Health Link, because of the COVID-19 emergency. Nevadans shopping for a new plan should be aware that deceptive telemarketers and websites have been advertising discount medical and short-term plans falsely claiming that they are Affordable Care Act (ACA) compliant.

Entities are reaching out to consumers via robocalls, telemarketing, or through misleading websites that appear legitimate and may have similar names to legitimate insurance companies.

“When shopping for insurance, stick to the Nevada Health Link website as your first stop,” said Attorney General Aaron D. Ford. “These fake websites are intentionally confusing, leaving consumers who fall for them with unpaid medical bills.” “Limited health benefit plans serve a purpose but are not meant for long term use and have gaps in coverage because they are not designed to be comprehensive health insurance, whereas ACA compliant plans are,” explained Insurance Commissioner Barbara Richardson. “Be vigilant, understand the policy you are buying, and reach out to
the Division if you have questions.”

If you receive an unsolicited call from a health insurance company, do not provide any personal information over the phone. Consumers are encouraged to research the difference between limited benefit plans, ACA compliant plans and other types of plans by visiting The website also lists all of the companies in Nevada that are licensed to sell plans and tips on shopping for insurance.

To verify that an individual, agency, or company is licensed with the Division of Insurance, visit the Division’s website. The State of Nevada Division of Insurance regulates Nevada’s insurance industry.

Credit Repair Companies

As Nevadans start to emerge after a difficult year, many consumers may be looking for a fresh start on their credit. Credit repair companies offer the chance to get your credit back on track, but Nevadans should be aware that some of these companies may not be entirely legitimate. “If you are unhappy with your credit, you can take steps to repair it on your own,” said Attorney General Aaron D. Ford. “If you would prefer to pay someone to set up a
repayment plan for you, be on the lookout for misleading companies that may be trying to get your personal information.”

If you want to hire a credit repair company, the Attorney General’s Bureau of Consumer Protection offers the following tips for spotting a scam. Be alert if a company:
• Asks you to pay all fees up front before it does any work on your behalf. Some companies may charge a one-time fee ranging from $15-$200 to set up the account. However, no credit repair organization may charge a consumer any money before the service is fully performed;
• Instructs you to dispute information on your credit report that you know is accurate. With your legal consent, the company may challenge and clean up any inaccurate items with the three major credit bureaus or directly with the creditors. If a company tells you to say you have been the victim of identity theft when you have not, this is illegal;
• Promises to remove all negative information from your credit report. Credit repair takes time and not every negative item can be removed; and
• Doesn’t explain your legal rights when they tell you about their services. Legitimate credit repair companies should include a copy of the Consumer Credit File Rights. Additionally, you have the right to cancel any services without incurring any penalties within three business days.

Under the CARES Act, you can obtain an extension and a forbearance on some types of loans for up to 180 days. These protections are valid until June 30, 2021. Homeowners with federally backed loans may be able to apply for mortgage forbearance. Federal student loans are eligible for suspensions of payments and defaults, and interest rates are set to zero, until September 30, 2021.

If you have been victimized by any crime related to the COVID-19 pandemic, please file a complaint about your experience to the Attorney General’s Office and the National Center for Disaster (NCDF) hotline at 1-866-720-5721 or by e-mailing the NCFD at [email protected]

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Refinancing a Vehicle With a Cosigner



The good news is that you don’t need your cosigner’s permission to refinance your car. Things can get tricky if your credit score isn’t good enough to qualify for refinancing, though. We’re covering typical refinancing requirements you may need to meet, and how refinancing impacts your cosigner.

Can My Cosigner Stop Me From Refinancing?

Refinancing a Car With a CosignerCosigners are useful for borrowers with poor credit. They can help you get into a car loan if your credit score isn’t good enough for an auto lender’s requirements. And, even better – the cosigner has no say in what you can or can’t do with your vehicle.

If you decide to refinance your vehicle or sell the car, you can do either without needing your cosigner’s permission. They have no rights to the vehicle since their name isn’t listed on the title. You don’t need to bring them to meet the refinancing lender when you apply for refinancing, either.

Refinancing is when you replace an auto loan on the same vehicle. The refinancing lender pays off the original loan, and once that’s paid off, your cosigner no longer has any obligation to the loan because it’s completed!

The only issue you may run into refinancing a car that you needed a cosigner to originally qualify for, is qualifying for refinancing by yourself.

Refinancing With Poor Credit

Borrowers typically need a cosigner when their credit score isn’t great. A cosigner lends you their good credit score to meet the loan qualifications. Just like auto financing, refinancing typically comes with requirements.

Here are some typical refinancing requirements:

  • You’ve had the auto loan for at least one year
  • You’ve stayed current on the car loan
  • The vehicle is under 10 years old with less than 100,000 miles
  • Your car has equity (vehicle’s value is higher than the loan balance)
  • Your credit score is good or has improved

Lenders may only consider you for refinancing if your credit situation has improved since the start of your auto loan. Recent, serious delinquencies can get in the way of refinancing, but if your credit score has been on the rise, the odds may be in your favor.

If you’ve been maintaining a good payment history on your car loan and keeping up with the rest of your bills, you may have a higher credit score now. Installment loans such as car loans can be great avenues for credit repair if you make all the payments on time.

Lender requirements vary, of course, but those are pretty common. If you’re feeling confident in your ability to qualify for refinancing, then check with our trusted partner for more information.

Refinancing Not an Option?

If you’ve missed a few payments on your car loan or your credit score still isn’t great, then you may struggle to qualify for refinancing. If your goal with refinancing was to remove the cosigner, selling the vehicle can accomplish this, too.

Remember that cosigners can’t stop you from selling the car (although it may be more polite to tell them if you do!). If you manage to sell the vehicle and completely pay off the lender, then you and the cosigner are both off the hook. But, if you need another car after the sale and you want to go it alone, pursuing a subprime auto loan may be for you.

Subprime car loans are for borrowers with less than perfect credit. Many borrowers with bad credit are eligible for vehicle financing without the help of a cosigner if they can meet the requirements. Finding a subprime auto loan can be tough if you don’t know where to look, but we want to help with that!

Here at Auto Credit Express, we’ve created a coast-to-coast network of special finance dealerships that are signed up with subprime lenders. Once you complete our auto loan request form, we’ll look for a dealer in your local area for free with no obligation. Get started on your path to a car loan today!

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