Deferment Period
What is a Deferment Period? A deferment period is a length of time where the borrower does not need to pay interest or repay the remaining amount on a loan. Before the loan is issued, a contractual agreement is decided between the lender and the borrower regarding the length of the deferment period. The diagram...
Default Rate
What is the Default Rate? The default rate is the rate of all loans issued by a lender or financial institution that is left unpaid by the borrower and declared to be in default. An individual loan is typically declared in default if no payments are made for an extended period as per the initial...
Deferred Interest
What is Deferred Interest? Deferred interest is a deal offered on what is essentially a loan, allowing the borrower to avoid paying interest for a set period of time, provided the borrower has paid the entirety of the loan or the cost of a specific item. Such a type of deal is popular when it...
Debt Consolidation
What is Debt Consolidation? Debt consolidation is a form of debt refinancing in which several smaller debts are consolidated into one simplified debt. It generally results in a lower interest rate, lower monthly payment, and a simplified payment plan. Debt consolidation simplifies payment plans by eliminating the number of debts and allowing consumers to put...
Debt Overhang
What is Debt Overhang? Debt overhang is when an organization (or government/family) incurs debt at such a high rate that they incur too much debt and are unable to fund future projects. In other words, a company accumulates so much debt that banks do not want to give them more money. Even if a company...
