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Debt Management - Capitalization of Interest

Capitalization of Interest occurs when your lender allows you to postpone the periodic payments of interest. The unpaid interest is added to your loan balance. For loans taken before 1999, lenders may capitalize interests no more frequently than quarterly. However, most lenders do not capitalize the interest until repayment begins. For loans taken after 1999, capitalization will always occur when repayment begins.

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