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A forbearance is a temporary modification of the monthly payment obligation on an education loan. Both federal education loans and private student loans offer forbearances, but with different criteria and terms. Forbearance options on private student loans are generally more limited than the forbearance options on federal education loans. There are three main types of forbearances: 1  Temporary cessation of monthly payments. 2  Temporary reduction in the monthly payment amount (e.g., interest-only payments).
A guarantor loan is a type of unsecured loan that requires a guarantor to co-sign the credit agreement. A guarantor is a person who agrees to repay the borrowerâs debt should he or she default on agreed repayments.