Deferment Period

1. A time during which a borrower does not have to pay interest or repay the principal on a loan. Deferment is common with student loans, and may be granted while the student is still in school or just after graduation when the student has few resources to repay the loan. Deferment may also be granted at the lender's discretion during other periods of financial hardship to provide temporary relief from debt payments and an alternative to default.

2. The period after the issue of a callable security during which it cannot be called by the issuer.

1. During a loan's deferment period, interest may or may not accrue. Borrowers should check their loan terms to determine whether a loan deferment means they will owe more interest than if they did not defer the payment. With student loans being federal loans, they do not accrue interest during the deferment period, but private loans typically do.

2. Different types of securities will have a call option allowing the issuer to buy them back at a predetermined price. The issuer cannot call the security back during the deferment period, which is uniformly predetermined by the underwriter and the issuer at the time of issuance.

For example, European options have a deferment period for the life of the option - they can be called only on expiry. Most municipal bonds are callable and have a deferment period of 10 years.


Investment dictionary. . 2012.

Look at other dictionaries:

  • deferment period — ➔ period * * * deferment period UK US noun [C] (also deferral period) ► INSURANCE in the UK, an agreed period of time that a person who has health insurance must be ill before the insurance company begins making payments to them: »Insurance… …   Financial and business terms

  • period — pe‧ri‧od [ˈpɪəriəd ǁ ˈpɪr ] noun [countable] a particular length of time: • She has been taken on for a 6 month trial period. acˈcounting ˌperiod ACCOUNTING a period of time to which a particular payment is related for accounting or tax purposes …   Financial and business terms

  • deferment — de‧fer‧ment [dɪˈfɜːmənt ǁ ɜːr ] also de‧fer‧ral [dɪˈfɜːrəl] noun [countable, uncountable] COMMERCE TAX FINANCE the act of delaying something, or the period of the delay itself: • The ban …   Financial and business terms

  • deferment — n 1. delay, holdup, postponement, suspension, moratorium, abeyance, prorogation; procrastination, tardiness, cunctation; Inf. stall, U. S. filibuster, Fabian policy; wait, waiting period; adjournment, break, breath, breather, pause, recess, time… …   A Note on the Style of the synonym finder

  • deferral period — UK US noun [C] ► INSURANCE DEFERMENT PERIOD(Cf. ↑deferment period) …   Financial and business terms

  • Call Protection — A protective provision of a callable security prohibiting the issuer from calling back the security for a period early in its life. The call protection is advantageous to investors because it prevents the issuer from forcing redemption early on… …   Investment dictionary

  • Selective Service System — Agency overview Formed May 18, 1917 September 16, 1940 Headquarters Arlington County, Virginia, United States …   Wikipedia

  • Conscription in Greece — Conscription Military service National service Conscription crisis Conscientious objection Civilian service …   Wikipedia

  • Conscription in the United States — Young men registering for conscription during World War I, New York City, June 5, 1917. The Draft redirects here. For other uses, see Draft (disambiguation) …   Wikipedia

  • RELIGIOUS LIFE AND COMMUNITIES — Jews UNDER OTTOMAN RULE The Jews of the pre Zionist old yishuv, both sephardim (from the Orient) and ashkenazim (of European origin), dedicated their lives to the fulfillment of religious precepts: the study of the torah and the meticulous… …   Encyclopedia of Judaism

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.