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Deferment Period
A specified time during which loan payments are temporarily suspended or reduced.
More Details
A deferment period is a period of time during which a borrower is not required to make payments on a loan. Deferment is often granted to borrowers who are experiencing financial hardship, such as unemployment, economic hardship, military service, or returning to school.
Example
If you experience financial hardship as a result of a pandemic, you may be able to secure a deferment on student loan payments. Once the deferment period is approved, you can stop making payments for the approved amount of time. Payments will resume after this period ends.
Related Terms
Line of Credit
A loan that allows a borrower to access funds up to a pre-approved credit limit, and is only charged interest on the borrowed funds.
Compound Interest
Interest calculated on the sum of a principal and accumulated interest from previous periods.
Adjustable Rate Mortgage (ARM)
A home loan with an interest rate that is fixed for a certain period, after which it may fluctuate with the market.

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