Does loan forbearance hurt your credit score?

Generally, no—if you enter forbearance with your lender's approval and follow the agreed terms, your lender will report your account as current or in forbearance, which does not directly lower your credit score. However, missing payments without approval will damage your score.

Will interest continue to accrue during forbearance?

In most cases, yes. Loan forbearance typically allows interest to accrue on the entire loan balance, including any unpaid interest. This means your total debt may increase, and your monthly payment after forbearance could be higher. Some deferment options may not accrue interest, but forbearance almost always does.

How do I request forbearance from my lender?

Contact your lender directly—by phone, online portal, or in writing—and explain your financial hardship. Be prepared to provide documentation, such as proof of income loss or medical bills. The lender will review your request and offer specific terms. Always get the agreement in writing before stopping payments.

What Is Loan Forbearance? A Guide for Borrowers

Reviewed by the LoanPolicies Editorial Team · Updated 2026-09-05

Learn what loan forbearance is, how it affects your interest rate and credit score, and when it might help you manage monthly payments. General guidance for borrowers.

Loan forbearance is a temporary pause or reduction in your monthly payments granted by your lender, typically during a financial hardship. It allows you to stop making payments or make smaller payments for a set period without going into default. This general guidance explains how forbearance works, what it means for your loan terms, and what to consider before requesting it.

How Loan Forbearance Works

When you request forbearance, your lender agrees to suspend or lower your monthly payment for a specific period, often three to twelve months. During this time, interest may continue to accrue on your loan, depending on the type of forbearance and the lender’s policy. This means your total loan balance can increase, and your monthly payment after forbearance may be higher to account for the added interest. Some lenders offer a repayment plan at the end of forbearance, such as adding the missed payments to the end of the loan term or requiring a lump sum. Always review the terms in writing before agreeing.

Loan Forbearance vs. Deferment

Both options provide temporary relief, but they differ in how interest is handled. Deferment often means interest does not accrue on certain loans (like subsidized federal student loans), while forbearance almost always results in interest accrual on all loan types. For unsubsidized loans and most private loans, forbearance can significantly increase the total cost over the loan term. Use the table below to compare key differences:

Feature	Forbearance	Deferment
Interest accrual	Yes, on all loan balances	Depends on loan type (often no on subsidized loans)
Credit score impact	No direct negative if payments are paused per agreement	Same
Eligibility	Wider range of hardship reasons	Often limited to specific situations (e.g., school, unemployment)
Loan term extension	Possible, may increase total interest paid	Possible, may increase total interest paid

When to Consider Loan Forbearance

Forbearance can be a helpful tool if you face a short-term financial setback, such as a job loss, medical emergency, or unexpected major expense. It gives you breathing room to avoid default and the severe consequences that come with it, like damage to your credit score and potential wage garnishment. However, it is not a long-term solution. Because interest continues to accrue, the longer you pause payments, the more you may owe overall. Before requesting forbearance, explore other options like adjusting your loan term, refinancing with a lower APR, or working with a credit counselor.

Impact on Your Credit and Loan Terms

When you enter forbearance as agreed with your lender, the arrangement itself does not directly harm your credit score. Your lender will typically report your account as current or in forbearance status. However, missing payments without prior approval can severely lower your credit score and make future borrowing more expensive. Also, keep in mind that forbearance does not change your original loan’s interest rate or APR, but it can extend your loan term, increasing the total interest you pay over time. If you plan to apply for a new loan soon, lenders may view a recent forbearance as a risk factor, potentially leading to higher rates or stricter terms.

Here are common types of forbearance you may encounter:

Student loan forbearance – Often available for federal and private student loans; interest accrues on all balances.
Mortgage forbearance – Provided by mortgage servicers during crises; may require a lump sum or repayment plan afterward.
Personal loan forbearance – Offered by some lenders on a case-by-case basis; terms vary widely.

Before making a decision, contact your lender to discuss your specific situation. Ask about the exact terms, how interest will be handled, and what repayment options exist after the forbearance period ends. This general guidance is not financial advice; every borrower’s circumstances are unique.

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