Default
Failure to repay a loan according to the terms agreed to when borrowers signed their promissory notes. Default occurs when a Direct Loan borrower becomes 270 days delinquent in making payments on their loan(s). The consequences of default can be severe.
Default Aversion
The activities of a guaranty agency that are designed to prevent a default by a borrower who is at least 60 days delinquent and that are directly related to providing collection assistance to the lender.
Deferment
A deferment is a temporary suspension of a borrower's monthly loan payment. There are many different types of deferments available.
Failure to repay a loan according to the terms agreed to when borrowers signed their promissory notes. Default occurs when a Direct Loan borrower becomes 270 days delinquent in making payments on their loan(s). The consequences of default can be severe.
Default Aversion
The activities of a guaranty agency that are designed to prevent a default by a borrower who is at least 60 days delinquent and that are directly related to providing collection assistance to the lender.
Deferment
A deferment is a temporary suspension of a borrower's monthly loan payment. There are many different types of deferments available.
During deferment of subsidized loans, principal payments are postponed and interest does not accrue.
During deferment of unsubsidized loans, principal payments are postponed but interest continues to accrue. Accrued unpaid interest will be added to the principal balance (capitalized) of the loan(s) at the end of the deferment period. This will increase the amounts borrowers owe.
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