How Do Deferred Student Loans Affect One's DTI (Debt To Income) Ratio
Only when a loan is reporting as a $0 payment to the credit bureaus will it not affect a debt-to-income ratio. If it is reporting as deferred then a percentage of the balance (i.e. 0.5% or 1%) is used to determine the monthly minimum payment. If a monthly loan payment, as listed on the credit report, shows a number higher than 1% then the lender will use that figure for calculations. In this case, it’s necessary to get a letter from the creditor stating what the total balance is and what the true monthly minimum payment should be.
NOTE: A lender will not count the first (12) months a loan is reported as deferred for student loans only.
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