ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A deferment is a period during which repayment of the principal and interest of your loan is temporarily delayed.

Detailed explanation-2: -A deferment period is an agreed-upon time during which a borrower does not have to pay the lender interest or principal on a loan. Depending on the loan, interest may accrue during a deferment period, which means the interest is added to the amount due at the end of the deferment period.

Detailed explanation-3: -Grace period is a feature provided by banks or insurance companies so that customers can delay payment for a certain period of time after the due date (after the payment deadline).

Detailed explanation-4: -If you’re having trouble repaying your loans, you may consider requesting a loan deferment or forbearance: With a loan deferment, you can temporarily stop making payments. With a loan forbearance, you can stop making payments or reduce your monthly payments for up to 12 months.

Detailed explanation-5: -Both grace periods and deferments are periods of time during which a borrower does not have to pay a lender money toward a loan. Grace periods tend to be built into loan terms, whereas most deferments require application and documentation.