Do school loans deferment affect debt-to-income ratio

Hi mgonz743,

Welcome to forums. First understand what happens when you defer. If you have a subsidized federal loan, then federal government pays the interest while you defer, and the payment towards principal is postponed, no interest is accrued. So the debt-income ratio is supposed to remain same.

In case of unsubsidized federal loan, you have to pay the interest during the deferment period, but payment for the principal amount is exempted. Here, if you fail to pay the interest, it is capitalized affecting your debt-to-income ratio.

That is because 6 months to 1 year deferment is considered to be optimal.