 TITLE: Do Deferred Payments Affect Credit? CONTENT: Will I Still Be Charged Interest During Deferment?\n--------------------------------------------------\nThere are certain situations when you don't need to pay the interest that accrues during deferment. For example, if you have subsidized federal student loans, the government may make the interest payments during deferment (but not for student loan forbearance).\nSubsidized student loans aside, you may be responsible for repaying the interest that accrues while you've postponed your payments. You may get a slight break if your interest rate only applies to your loan's principal balance during deferment—meaning you won't be charged interest on the interest that accrues.\nHowever, even then, once you start making payments, the accrued interest could be capitalized—added to your principal balance—and your interest rate now applies to the larger principal balance. As a result, more interest may accrue each month after your deferment ends.\nDepending on the arrangement, you may add additional loan payments to the end of your loan's term or your monthly payment amount may increase. In either case, you wind up paying more overall than if you hadn't deferred your payments.\nFor mortgages, you may have to make a large lump-sum payment for the entire amount past due that accrued during the forbearance. This can include the missed loan payments, interest and insurance. END