A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Federal Student LoanAn education loan issued by the U.S. government that offers fixed rates and flexible repayment and hardship options.
- Private Student LoanAn education loan from a bank or lender, usually with terms based on your credit and fewer hardship protections than federal loans.
- Interest CapitalizationWhen unpaid interest gets added to your loan principal, so future interest is charged on a larger balance.
- ForbearanceA temporary pause or reduction of loan payments granted for hardship, during which interest usually continues to accrue.
- Loan ForgivenessA program that cancels some or all of a remaining loan balance after you meet certain conditions, common with federal student loans.
- DefermentA temporary pause on loan payments, often for school or hardship, during which interest may or may not keep building.
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Plain-English education — not personalized legal, tax, or investment advice.