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Balance Transfer, Best of, Pay Down My Debt

Best Balance Transfer Credit Cards: Intro 0% APRs up to 18 Months

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

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If you’re carrying a balance on your credit card, you’re not alone. Fifty-nine percent of Americans carry a balance month-to-month, with the average balance $6,354 per cardholder, according to a study by CompareCards. Carrying a balance from one month to the next is never ideal, but it can happen to the best of us.

If your balance is incurring high interest charges, you should consider transferring your debt to a balance transfer card. These cards offer no or low interest and can save you a substantial amount of money. There’s often a 3%-5% balance transfer fee, but it can be worthwhile — just do the math to make sure by using this balance transfer calculator.

Most balance transfer cards require good or excellent credit, so you may not qualify depending on your credit score. It’s a good idea to check your credit score before you apply for a card, so you know which cards provide you with the best approval odds. LendingTree, our parent company, lets you view your credit score for free and provides insight into what affects your score and outlines steps you can take to improve it. If your score prevents you from qualifying for a balance transfer card, you can explore taking out a personal loan instead.

We’ve selected the best balance transfer cards from our database of over 3,000 credit cards, so you can find the card that best fits your needs — whether it’s a card with a long intro 0% APR period, no balance transfer fee, or a low promo APR for several years.

Longest balance transfer offers

When you’re looking to transfer a large balance, it may be in your best interest to choose a balance transfer card with a long intro period. Most balance transfer cards have intro periods of 12 or 15 months, but that may not be enough time to pay off your debt. Consider cards offering no interest for 18 or 21 months.

Here are some of the best cards:

Citi Simplicity® Card - No Late Fees Ever

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The information related to Citi Simplicity® Card - No Late Fees Ever has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Citi Simplicity® Card - No Late Fees Ever

Intro Purchase APR
0% for 18 months on Purchases
Intro BT APR
0% for 18 months on Balance Transfers
Regular Purchase APR
14.74% - 24.74% (Variable)
Annual fee
$0
Balance Transfer Fee
Balance transfer fee – either $5 or 3% of the amount of each transfer, whichever is greater.
Credit required
good-credit
Excellent/Good
The Citi Simplicity® Card offers one of the longest balance transfer periods available: intro APR of 0% for 18 months on balance transfers. Additionally, the card comes with an intro APR of 0% for 18 months on purchases, which is helpful if you plan to use this card for more than just a balance transfer. After the balance transfer and purchase intro periods end, there’s a 14.74% - 24.74% (Variable) APR). Just know, this card charges a balance transfer fee of Balance transfer fee – either $5 or 3% of the amount of each transfer, whichever is greater.

Discover it® Balance Transfer

The Discover it® Balance Transfer stands out from other balance transfer cards by offering a rewards program: 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. While this is a great benefit, don’t let this distract you from your primary goal — getting out of debt, not earning rewards, so it’s best not to rack up new charges on a balance transfer card.

Wells Fargo Platinum card

The information related to Wells Fargo Platinum card has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Wells Fargo Platinum card

Regular Purchase APR
16.49%-24.49% (Variable)
Intro Purchase APR
0% intro APR for 18 months from account opening
Intro BT APR
0% intro APR for 18 months on qualifying balance transfers
Annual fee
$0
Balance Transfer Fee
3% intro for 120 days from account opening, then up to 5%; min: $5
Credit required
good-credit
Excellent/Good
The Wells Fargo Platinum card also offers an intro 0% intro APR for 18 months on qualifying balance transfers, but this applies to new purchases as well. After the intro period ends, a 16.49%-24.49% (Variable) APR for purchases and balance transfers applies. The balance transfer fee is 3% intro for 120 days from account opening, then up to 5%; min: $5. While this card has no rewards, you can receive cell phone protection up to $600 (subject to a $25 deductible) against covered damage or theft when your monthly cell phone bill is paid with your card.

No balance transfer fee cards

If you want to maximize savings with a balance transfer, you should consider cards that don’t charge a balance transfer fee. These cards can save you the typical 3%-5% fee most balance transfer cards charge. Just know, cards with no balance transfer fees often have shorter intro periods of 15 months or less. You can read our roundup for an extensive list of no balance transfer fee cards.

Here are some of the best cards:

The Amex EveryDay® Credit Card from American Express

The Amex EveryDay® Credit Card from American Express is a well-rounded card that offers an intro 0% for 15 months on balance transfers and purchases (after, 12.99% - 23.99% variable APR). In addition to the intro periods, you can benefit from a rewards program tailored to U.S. supermarket spenders where you earn 2x points at U.S. supermarkets, on up to $6,000 per year in purchases (then 1x), and 1x points on other purchases

The intro offers, coupled with the rewards program make The Amex EveryDay® Credit Card from American Express the frontrunner among balance transfer cards. This card presents cardholders with the unique opportunity to transfer a balance and make a large purchase during the intro period without incurring interest, and earn rewards on new purchases.

Chase Slate®

The Chase Slate® offers the same 0% Intro APR on Balance Transfers for 15 months and 0% intro apr on purchases for 15 months as the previous two cards. After the intro period ends, there’s a 16.74% - 25.49% Variable APR. This is a no-frills card that won’t earn you rewards or noteworthy benefits, but can help you get out of debt.

Low rate balance transfer cards

If you think it will take longer than 21 months to pay off your credit card debt, you might want to consider a low rate balance transfer card. Rather than pay a balance transfer fee and receive a promotional 0% APR, these cards offer a low interest rate for three years or more. The longest offer can give you a low rate that only goes up if the prime rate goes up. If you can’t get that offer, there is another good option offering a low rate for three years.

Variable Rate Credit Visa®Card from UNIFY Financial CU

Variable Rate Credit Visa®Card from UNIFY Financial CU

Regular Purchase APR
8.99%-17.49% Variable
Intro Purchase APR
N/A
Intro BT APR
N/A
Balance Transfer Fee
$0
If you need a long time to pay off debt at a reasonable rate, and have great credit, it’s hard to beat this deal from Unify Financial Credit Union. The Variable Rate Credit Visa®Card from UNIFY Financial CU offers an ongoing 8.99%-17.49% Variable APR. Plus, there’s no balance transfer fee.

Note: Membership to Unify Financial Credit Union is required to open this card, but anyone can join through one of their affiliate partners, the Surfrider Foundation or Friends of Hobbs, at no additional charge.

Prime Rewards Credit Card from SunTrust Bank

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on SunTrust Bank’s secure website

Prime Rewards Credit Card from SunTrust Bank

Regular Purchase APR
12.24%–21.24% Variable
Intro BT APR
3 year introductory offer at Prime Rate (currently 3.25% variable APR) on balance transfers made in the first 60 days after account opening.
Annual fee
$0
Rewards Rate
Earn 1% Unlimited Cash Back on all qualifying purchases.
Balance Transfer Fee
None for all balances transferred within 60 days of account opening, then $10.00 or 3% of the amount of the transfer, whichever is greater
The Prime Rewards Credit Card from SunTrust Bank offers a 3 year introductory offer at Prime Rate (currently 3.25% variable APR) on balance transfers made in the first 60 days after account opening. After, 12.24%–21.24% Variable APR. There’s also an intro balance transfer fee: None for all balances transferred within 60 days of account opening, then $10.00 or 3% of the amount of the transfer, whichever is greater. Beware, the low variable APR doesn’t apply to new purchases, and new transactions will incur a 12.24%–21.24% Variable APR.

Balance transfer card for fair credit

Aspire Platinum Mastercard® from Aspire FCU

Regular Purchase APR
8.15% - 18.00% Variable
Intro Purchase APR
0% Intro APR on Purchases for 6 months
Intro BT APR
0% Intro APR on Balance Transfers for 6 months
Annual fee
$0
Balance Transfer Fee
$5 or 2% of the amount of each balance transfer, whichever is greater
Credit required
fair-credit

Average

If your have fair credit, you may qualify for the Aspire Platinum Mastercard® from Aspire FCU. On their site, Aspire states a “fair to good credit score [is] required.” This is good news for people with less than stellar credit. However, the balance transfer offer is significantly lower than cards for good or excellent credit — 0% Intro APR on Balance Transfers for 6 months (after, 8.15% - 18.00% Variable APR). Regardless, six months is better than nothing. And, with careful planning, you can pay off transferred balances during the intro period.

Note: This is a credit union card, so membership is required. Anyone can become a member of the Aspire Federal Credit Union by joining the American Consumer Council at no additional cost.

Learn more

Checklist before you transfer

Never use a credit card at an ATM

If you use your credit card at an ATM, it will be treated as a cash advance. Most credit cards charge an upfront cash advance fee, which is typically about 5%. There is usually a much higher “cash advance” interest rate, which is typically above 20%. And there is no grace period, so interest starts to accrue right away. A cash advance is expensive, so beware.

Always pay on time

If you do not make your payment on time, most credit cards will immediately hit you with a steep late fee. Once you are 30 days late, you will likely be reported to the credit bureau. Late payments can have a big, negative impact on your score. Once you are 60 days late, you can end up losing your low balance transfer rate and be charged a high penalty interest rate, which is usually close to 30%. Just automate your payments so you never have to worry about these fees.

Get the transfer done within 60 days

Most balance transfer offers are from the date you open your account, not the date you complete the transfer. It is in your interest to complete the balance transfer right away, so that you can benefit from the low interest rate as soon as possible. With most credit card companies, you will actually lose the promotional balance transfer offer if you do not complete the transfer within 60 or 90 days. Just get it done!

Don’t spend on the card

Your goal with a balance transfer should be to get out of debt. If you start spending on the credit card, there is a real risk that you will end up in more debt. Additionally, you could end up being charged interest on your purchase balances. If your credit card has a 0% balance transfer rate but does not have a 0% promotional rate on purchases, you would end up being charged interest on your purchases right away, until your entire balance (including the balance transfer) is paid in full. In other words, you lose the grace period on your purchases so long as you have a balance transfer in place.

Don’t try to transfer between two cards of the same bank

Credit card companies make balance transfer offers because they want to steal business from their competitors. So, it makes sense that the banks will not let you transfer balances between two credit cards offered by the same bank. If you have an airline credit card or a store credit card, just make sure you know which bank issues the card before you apply for a balance transfer.

Comparison tools

Savings calculator – which card is best?

If you’re still unsure about which cards offer you the best deal for your situation, try our calculator. You get to input the amount of debt you’re trying to get a lower rate on, your current rate, and the monthly payment you can afford. The calculator will show you which cards offer you the most savings on interest payments.

Balance transfer or a loan?

A balance transfer at 0% will get you the absolute lowest rate. But you might feel more comfortable with a single fixed monthly payment, and a single real date your loan will be paid off. A lot of new companies are offering great rates on loans you can pay off over 2, 3, 4, or 5 years. You can find the best personal loans listed on our site here.

And you might find even though their rates aren’t 0%, you could afford the payment and get a plan that takes care of your debt for good at once.

Use our calculator to see how your payments and savings will compare.

Questions and Answers

It depends, some credit card companies may allow you to transfer debt from any credit card, regardless of who owns it. Though, they may require you to first add that person as an authorized user to transfer the debt. Just remember that once the debt is transferred, it becomes your legal liability. You can call the credit card company prior to applying for a card to check if you’re able to transfer debt from an account where you are not the primary account holder.

Yes, you can. Most banks will enable store card debt to be transferred. Just make sure the store card is not issued by the same bank as the balance transfer credit card.

As a general rule, if you can pay off your debt in six months or less, it usually doesn’t make sense to do a balance transfer.

Here is a simple test. (This is not 100% accurate mathematically, but it is an easy test). Divide your credit card interest rate by 12. (Imagine a credit card with a 12% interest rate. 12%/12 = 1%). In this example, you are paying about 1% interest per month. If the fee on your balance transfer is 3%, you will break even in month 3, and will be saving money thereafter. You can use that simplified math to get a good guide on whether or not you will be saving money.

And if you want the math done for you, use our tool to calculate how much each balance transfer will save you.

With all balance transfers recommended at MagnifyMoney, you would not be hit with a big, retroactive interest charge. You would be charged the purchase interest rate on the remaining balance on a go-forward basis. (Warning: not all balance transfers waive the interest. But all balance transfers recommended by MagnifyMoney do.)

Many companies offer very good deals in the first year to win new customers. These are often called “switching incentives.” For example, your mobile phone company could offer 50% off its normal rate for the first 12 months. Or your cable company could offer a big discount on the first year if you buy the bundle package. Credit card companies are no different. These companies want your debt, and are willing to give you a big discount in the first year to get you to transfer.

If you transfer your debt and use your card responsibly to pay off your balance before the intro period ends, then there is no trap associated with the 0% APR period. But, if you neglect making payments and end up with a balance post-intro period, you can easily fall into a trap of high debt — similar to the one you left when you transferred the balance. As a rule of thumb, use the intro 0% APR period to your advantage and pay off ALL your debt before it ends, otherwise you’ll start to accumulate high interest charges.

Balance transfers can be easily completed online or over the phone. After logging in to your account, you can navigate to your balance transfer and submit the request. If you rather speak to a representative, simply call the number on the back of your card. For both options, you will need to have the account number of the card with the debt and the amount you wish to transfer ready.

You will be charged a late fee by missing a payment and may put your introductory interest rate in jeopardy. Many issuers state in the terms and conditions that defaulting on your account may cause you to lose out on the promotional APR associated with the balance transfer offer. To avoid this, set up autopay for at least the minimum amount due.

No, you can’t. Balances can only be transferred between cards from different banks. That includes co-branded cards, so be sure to check which issuer your card is before applying for a balance transfer card — since you don’t want to find out after you’ve been approved that both cards are backed by the same issuer.

Many credit card issuers will allow you to transfer money to your checking account. Or, they will offer you checks that you can write to yourself or a third party. Check online, because many credit card issuers will let you transfer money directly to your bank account from your credit card. Otherwise, call your issuer and ask what deals they have available for “convenience checks.”

In most cases, you cannot. However, if you transfer a balance when you open a card, you may be able to. Some issuers state in their terms and conditions that balance transfers on new accounts will be processed at a slower rate compared with those of old accounts. You may be able to cancel your transfer during this time.

Yes, it is possible to transfer the same debt multiple times. Just remember, if there is a balance transfer fee, you could be charged that fee every time you transfer the debt. Also, don’t keep on transferring your debt without making payments because you won’t accomplish much.

You can call the bank and ask them to increase your credit limit. However, even if the bank does not increase your limit, you should still take advantage of the savings available with the limit you are given. Transferring a portion of your debt is more beneficial than transferring none.

Yes, you decide how much you want to transfer to each credit card. For example, if you have $3,000 in debt, you can transfer $2,000 to Card A and $1,000 to Card B.

No, balance transfers are excluded from earning any form of rewards whether it’s points, miles or cash back.

No, there is no penalty. You can pay off your debt whenever you want without a penalty. It’s key to pay off your balance as soon as possible and within the intro period to avoid carrying a balance post-intro period.

Mathematically, the best balance transfer credit cards are no fee, 0% intro APR offers. You literally pay nothing to transfer your balance and can save hundreds of dollars in interest had you left your balance on a high APR card. Check out our list of the best no-fee balance transfer cards here. However, those cards tend to have shorter intro periods of 15 months or less, so you may need more time to pay off your balance.

If you are running out of time on your intro APR and you still have a balance, don’t sweat it. At least two months before your existing intro period ends, start looking for a new balance transfer offer from a different issuer. Transfer any remaining balance to the card with the new 0% intro offer. This can provide you with the additional time needed to pay off your balance. Ideally, look for a card that has a 0% intro APR and also no balance transfer fee.

The information related to The Amex EveryDay® Credit Card from American Express and Chase Slate® has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

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Pay Down My Debt

The 11 Best Budgeting Apps for $0

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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budgeting apps
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With the New Year just around the corner, many people will make the resolution to set and maintain a budget.

The reasons for deciding to set a budget vary. Perhaps you own your own business and want to be better at separating your personal and business expenses. Maybe you recently got married, and you and your spouse want to combine your finances as seamlessly as possible. Or perhaps your credit card debt has reached an all-time high, and you’ve resolved to finally get it under control.

Whatever your reason for budgeting may be, there are many apps that can help you on your journey. The best part? The following apps won’t cost you a penny. Take a look.

1. Mint

Mint Budgeting APP
What it’s good for: Budgeters who want analytics and savings recommendations.
Available for: Apple App Store/Google Play

You’ve probably heard of Mint before — it’s included in nearly every roundup of the top budgeting apps. That’s because it has numerous capabilities and analytics tools, and has been around for 12 years. With this app, you can see your entire financial picture: credit card balances, bank accounts, bills and investments, among others. Mint also allows you to access your credit score for free.

The app also offers analytics information like trends and recommendations for how to make the most of your savings. You can also set monthly budgets to keep yourself accountable in the future.

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on Mint Budgeting’s secure website

2. Buxfer

Buxfer Budgeting App
What it’s good for: People who want an easy-to-use app with basic budgeting tools.
Available for: Apple App Store/Google Play

Buxfer is fairly easy to use, with a simple interface that even the least tech savvy people could likely understand. You can sync all of your accounts with Buxfer so your entire financial picture is in one place. The dashboard shows a handful of numbers: your net worth and net loaned, the balance of your budget, your income and expenses. The app also features reports of spending over time (by week, month, or year) in which you can see a breakdown of how much you spent on things such as food, bills and shopping.

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on Buxfer Budgeting App’s secure website

3. Wally

Wally App
What it’s good for: People who don’t want to link their bank accounts to a budgeting app, but do want to track spending.
Available for: Apple App Store/Google Play

Worried that you spend too much money eating out on the weekends or shopping online? Wally might be the app for you. This app allows users to manually input and track their income and expenses, ideal for people who only want an app for tracking their spending habits and nothing more. Plus, the app doesn’t require that users link their bank accounts. You can take photographs of receipts and input them into the app, too.

There are two options when downloading this app on iOS: Wally Lite and Wally Next. Wally Lite is a simpler version, while Wally Next offers more complex features like analytics and options for joint accounts.

4. EveryDollar

EveryDollar
What it’s good for: People looking for a no-frills method for setting and sticking to a budget.
Available for: Apple App Store/Google Play

EveryDollar comes from Dave Ramsey, popularizer of the snowball method for paying off debt and author of “The Total Money Makeover.” Although there is a paid option for this app ($9.99 per month to automatically link all of your accounts), a free option is also available if you manually input your information.

The app is fairly simple: You input your monthly salary, plan your expenses (things like groceries, bills and utilities) and then track your spending each month.

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on EveryDollar ’s secure website

5. Goodbudget

Good Budget Free App
What it’s good for: Those who like the old-school “envelope” system for budgeting.
Available for: Apple App Store/Google Play

Goodbudget is ideal for people who simply want to organize their expenses and aren’t looking for any fancy analytics tools. The envelope system for budgeting involves putting a certain amount of money in different envelopes ahead of time in order to stick to a budget. This app digitizes that method, allowing users to create virtual “envelopes” for things like groceries, eating out, rent, car payment and entertainment.

Users can also sync their account with a significant other. (This app was formerly known as EEBA.)

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on Good Budget’s secure website

6. PocketGuard

PocketGuard Budget App
What it’s good for: People who want a simple, streamlined view of how much money they have at any given moment.
Available for: Apple App Store/Google Play

PocketGuard allows users to link their checking and savings accounts, credit cards, investments and loans in order to get an overview of their entire financial picture. In addition, the app tracks users’ spending by breaking down what goes toward various categories like eating out, entertainment and rent.

This app has an “In My Pocket” feature that takes all of the information from your linked accounts to tell you exactly how much available money you have to spend. One added bonus is that PocketGuard connects to Apple Watch.

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on PocketGuard Budget’s secure website

7. Personal Capital

Personal Capital App
What it’s good for: Tracking one’s investment portfolio and net worth.
Available for: Apple App Store/Google Play

Personal Capital is the ideal app for people who are avid investors and/or have a decent amount of money to their name. The Portfolio feature allows users to input all of their investments (e.g. stocks, retirement savings, personal savings and other accounts) to get an overall picture of financial growth. The app also features a spending tracker tool and can be synced with Apple Watch.

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on Personal Capital’s secure website

8. Simple

Simple
What it’s good for: As the name implies, those looking for a simple way to track their spending.
Available for: Apple App Store/Google Play

This streamlined app allows users to sync their bank accounts so they can set and stick to a budget. There is a section called “Goals” that functions similarly to the envelope system for budgeting. Create savings goals (such as your upcoming honeymoon or a new laptop) and decide how much you’d like to allocate toward each goal — the funds will automatically be distributed. Simple also has a feature called “Expenses” in which you can ensure you’ve already set aside what you need to each month for things like bills and rent.

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on Simple’s secure website

9. Prism

prism
What it’s good for: People with many monthly expenses, such as bills and subscription services.
Available for: Apple App Store/Google Play

Netflix, Hulu, Amazon Prime (and Spotify). If you subscribe to these services (and others) and want to see everything in one place, Prism might be the app for you. It allows users to see all of their monthly subscriptions, bills and income in one place. A calendar view shows when each bill is due so you can plan ahead and never miss a payment.

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on Prism’s secure website

10. Tycoon

tycoon
What it’s good for: Freelancers who want to keep their tasks and earnings organized.
Available for: Apple App Store

Whether you’re a graphic designer, writer or surfing instructor, working as a freelancer means organization skills are a necessity. If you’re successful as a freelancer but lack these skills, you might want to download Tycoon. This app lets you track all of your jobs and earnings in one place, while also offering a breakdown of what you owe in taxes. You can see which invoices have been paid and which are still pending, and the app will even alert you when invoices are past due.

11. LendingTree

LendingTree
What it’s good for: People looking to increase their credit score or take out a loan.
Available for: Apple App Store/Google Play

The LendingTree app is ideal for those looking to improve their overall credit. The app allows users to see their credit score with a performance review for each category that contributes to one’s score (e.g. payment history or amount owed). LendingTree’s app offers recommendations for how people can improve their credit score and save money. The app also allows you to shop around and see various offers for auto loans, personal loans, mortgages and other types of loans.

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Regardless of the app you choose, you’re on the right track by finally deciding to set a budget and stick to it. Think about which features are most important to you and get started.

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Understanding the Difference Between Forbearance and Deferment

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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Need a break from repaying your student loans? Both deferment and forbearance allow you to postpone payments on your federal student loans temporarily, but there are also differences between them.

In periods of deferment, for example, subsidized loans don’t accrue interest, so you don’t have to worry about your balance growing. Forbearance, however, can be easier to qualify for.

Generally, all federal loans are eligible for deferment or forbearance, but only some private student loans offer this option.

[Note: Some details may have changed due to coronavirus pandemic measures. Read more here.]

To get the full picture on pausing your student loan repayment, let’s look at the following topics:

Key differences between forbearance and deferment

One major difference between forbearance and deferment has to do with subsidized loans, which are loans that are available to undergraduate students with financial need. If you defer subsidized loans, you won’t have to worry about any interest accruing on your balance.

This is true whether you’re in your grace period during college or get a deferment for an alternative reason, such as economic hardship. That said, your unsubsidized loans will accrue interest during a period of deferment. And typically, all loans accrue interest during a period of forbearance.

The only exception to this is the emergency forbearance that has been put in place in response to the coronavirus pandemic (in which both payments and interest have been suspended on qualifying loans).

So if you have any subsidized loans, deferment is usually the better option. But if you don’t, there’s no major difference between forbearance and deferment, apart from the criteria you’ll need to meet to qualify.

This chart shows the difference between forbearance and deferment, specifically for subsidized loans.

Qualifying for forbearance and deferment

Another major difference between forbearance and deferment has to do with the criteria you’ll need to meet to be eligible. There are two types of forbearance: mandatory and discretionary.

If you meet a requirement for mandatory forbearance, your loan servicer has to grant your request. If you don’t, your loan servicer can decide whether or not to pause your payments.

Mandatory forbearance

Forbearance will be granted if any of the following pertain to you:

  • You are enrolled in a medical or dental internship or residency.
  • You are serving in a national service position, such as AmeriCorps, are part of the Department of Defense repayment program, are in the National Guard or are eligible for teacher loan forgiveness programs.
  • Your monthly loan payment is 20% or more of your gross monthly income.
  • You are teaching in a program that qualifies for loan forgiveness.
  • You qualify for partial repayment under the U.S. Department of Defense Student Loan Repayment Program.
  • You are called into active military duty.

Discretionary forbearance

Forbearance may be granted if any of the following apply:

  • You are enrolled less than half time (each school has their own definition of ‘half time’).
  • Poor health.
  • Unemployment (beyond the maximum deferment time limit).
  • A reduction in work hours.
  • A life-changing circumstance.

Deferment

You can qualify for a deferment if you are:

  • Enrolled at least half time at an eligible postsecondary school.
  • In a full-time course of study in a graduate fellowship program.
  • In an approved full-time rehabilitation program for individuals with disabilities.
  • Unemployed or unable to find full-time employment (for a maximum of three years).
  • Experiencing an economic hardship (including Peace Corps service) as defined by federal regulations (for a maximum of three years).
  • Serving on active duty during a war or other military operation or national emergency and, if you were serving on or after Oct. 1, 2007, for an additional 180-day period following the demobilization date for your qualifying service.
  • Performing qualifying National Guard duty during a war, other military operation or national emergency and for an additional 180-day period following the completion of your qualifying service.
  • A member of the National Guard or other reserve component of the U.S. armed forces (current or retired) and you are called or ordered to active duty while you are enrolled (or within six months of having been enrolled) at least half time at an eligible school.

Applying for forbearance or deferment

If you’re at risk of falling behind on your student loans, act fast. You don’t want your loans to go into default, as it comes with a host of bad consequences and makes your loans ineligible for forbearance or deferment until you get them back into active standing.

Start taking action by reaching out to your loan servicer. Be sure to keep the lines of communication open. You’ll need to work with your loan servicer(s) to apply for deferment or forbearance. You can sign into your Federal Student Aid account to see the details of your loans and loan servicers.

Your student loans can be placed in deferment for up to three years. Forbearance is typically granted in 12-month intervals for up to three years.

Note that putting loans into deferment or forbearance does not hurt your credit score. That’s another reason why you should pursue forbearance or deferment if you’re at risk of default — missing payments can do serious damage to your credit.

How to restart normal repayment on your student loans

Before your deferment or forbearance term expires, contact the servicer of the loan. You will need to explain your current situation.

Both you and the lender will create a repayment plan that will work for your new situation. Note that if your situation changes before your deferment or forbearance period expires, you can resume payments at any time.

If you’re able to make small payments, your lender might recommend an income-driven repayment plan, which adjusts your monthly payments in accordance with your income and family size.

Final words of advice on forbearance and deferment

If you’re having trouble paying your student loans, contact your loan servicer(s). Keep paying toward the current agreement. Do not let your loans go into default. If they do go into default, you must get current before applying for either deferment or forbearance.

If your loans are current, begin the application process for deferment or forbearance. Lenders want their money. They are willing to work with you to make that happen — even if payments are delayed. Talk with them. They will listen.

Whether you go with deferment or forbearance, what’s important is you’re addressing your situation and doing what it takes to avoid default.

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