How Postponing Student Loan Payments Raises Costs

How Postponing Student Loan Payments Raises Costs

It may be better to pay at least a small amount towards student debt through income-based repayment programs than to choose forbearance and accrue capitalized interest. (SIphotography/Getty Images) Postponing payment on student loans can be tempting for many new graduates who feel cash-crunched, but doing so can lead to ballooning payments down the road. Borrowers can postpone their monthly loan payments with forbearance, but unpaid interest during forbearance still accrues and capitalizes. This means accrued interest is added to the principal, and the interest will be calculated based on the new, higher balance. “I went the…

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