What is forbearance?

Forbearance is a temporary postponement or reduction of mortgage payments granted by a lender or creditor to help a borrower through a period of financial hardship.

In forbearance, the lender allows the borrower to pause or reduce payments for a limited time. The borrower must repay the missed or reduced payments in the future, typically at the end of the forbearance period.

No, forbearance is not loan forgiveness. It is a temporary relief that must be repaid later. Loan forgiveness, on the other hand, cancels part or all of the debt and does not require repayment.

Borrowers who experience temporary financial hardship, such as job loss, illness, or natural disasters, may qualify for forbearance, depending on the lender's policies.

While being in forbearance should not directly affect your credit score, missed payments prior to starting forbearance and any mishandling post-forbearance can negatively affect credit ratings.

Forbearance duration varies by lender and loan type, but it typically lasts for three to six months. Some lenders may offer extensions under specific circumstances.

Yes, interest generally continues to accrue on the outstanding balance during forbearance, which can increase the total loan amount to be repaid.

Yes, there are several types, including mortgage forbearance, student loan forbearance, and forbearance for other types of loans, each with specific terms and conditions.

You typically need to contact your lender or loan servicer, explain your situation, and submit any required documentation or applications to request forbearance.

After forbearance ends, you must resume regular payments and pay back the missed amounts either in a lump sum, through a repayment plan, or by loan modification.

In some cases, yes. Borrowers can request an extension if their financial hardship persists, but it depends on the lender's policies and the borrower's eligibility.

Forbearance can provide temporary relief, but it may not suit everyone due to interest accrual and repayment obligations. Borrowers should consider all options and consult with their lender.

Alternatives include loan modification, refinancing, budgeting assistance, or even selling the asset to cover the debt, depending on your specific situation.

Forbearance itself does not lead to foreclosure; it is intended to prevent it. However, failure to resume payments post-forbearance can lead to foreclosure.

Yes, borrowers can make partial or full payments during forbearance, which can help reduce the amount owed after the forbearance period ends.

Forbearance is available for many types of loans, including mortgages and student loans, but eligibility and terms can vary significantly.

Some lenders may allow forbearance to cover past due payments as a part of their agreement, but this depends on individual lender policies.

Yes, many lenders offered forbearance and other relief options specifically for those impacted by COVID-19-related economic challenges.

Forbearance provides temporary financial relief, helps prevent default or foreclosure, and allows borrowers time to recover from hardship.

Both deferment and forbearance postpone payments, but deferment often has different terms and typically does not accrue interest for certain federal student loans.