Forbearance

Forbearance

A postponement of loan payments, granted by a lender or creditor, for a temporary period of time. This is done to give the borrower time to make up for overdue payments.

Notes:

Basically, forbearance allows the borrower to put a temporary hold on his or her monthly payments, usually for up to one year. Forbearance is common for unemployed people with outstanding student loans.

See also: Bankruptcy, Credit, Creditor, Credit Rating, Credit Risk, Impaired Credit