When a loan is in forbearance, it means that the borrower and the lender have agreed to temporarily suspend or reduce the borrower's loan payments due to a financial hardship. This hardship could be due to a variety of reasons, such as job loss, medical expenses, or natural disasters.
During a forbearance period, the borrower may be allowed to make reduced payments, make no payments at all, or defer payments for a certain period of time. The length and terms of the forbearance period may vary depending on the lender and the borrower's specific circumstances.
It's important to note that forbearance is not forgiveness of the loan, and the borrower is still responsible for repaying the loan in full. The missed or reduced payments during the forbearance period will typically be added to the end of the loan term or restructured into a repayment plan once the forbearance period ends.
Forbearance is typically granted for a limited period of time and requires the borrower to provide documentation of their financial hardship. In some cases, the lender may require the borrower to continue making partial payments during the forbearance period or pay additional fees.
If you are experiencing financial hardship and are unable to make your loan payments, it's important to contact your lender as soon as possible to discuss your options, including forbearance. It's also important to understand the terms and conditions of the forbearance agreement and how it will affect your loan balance and repayment schedule.
