I have recently (1 week) become unemployed. Immediately my first thought was my monthly loan payment and how I was going to be able to afford it. I am trying to decide whether IBR or Deferment would be best. I only expect the unemployment to last at most 3 months, I plan to open my own business in the meantime (tired of corporate america). I was initially thinking about going on deferment but then someone suggested IBR. I understand if I am unemployed my payment would be zero, but I was also told the government would be paying the interest on my subsidized loans. BUT if i were to switch out from IBR back to my 20 year plan that all the interest would be recapitalized back onto my principle.

Few questions:
In this situation which would be better for me IBR or Deferment?
Does either affect your credit score?
If I select IBR, do they determine my payment on last years income or me being unemployed as of a week ago?
What is the maximum payment they could make me pay on IBR, I’ve heard 15% of my monthly income no matter how high that goes, or maximum what you would pay for 10 year repayment?
What is the benefit of deferment in this situation over IBR?

Thanks so much for your help