Forbearance is a temporary legal postponement or reduction of loan payments granted by a lender to a borrower facing financial hardships. This arrangement helps borrowers avoid loan default, foreclosure, or other penalties when they are unable to meet their regular payment schedule. Forbearance is commonly applied to mortgage loans, student loans, and other types of debt.
During forbearance, the lender agrees not to take usual collection actions, such as foreclosure or repossession, while allowing the borrower to catch up on payments later or resume payments under modified terms. However, interest typically continues to accrue on the unpaid loan balance during this period.
Forbearance differs from loan forgiveness or debt cancellation because the borrower still owes the full amount, but with delayed payment obligations. Repayment terms after forbearance can vary: borrowers might have to pay missed payments as a lump sum, over time, or have the loan term extended.
For example, during the COVID-19 pandemic, mortgage forbearance programs allowed millions of homeowners to pause payments temporarily, helping many avoid foreclosure amid widespread economic disruptions.
Borrowers should request forbearance proactively when facing financial challenges and fully understand the terms, including how interest accrues and repayment will be handled. Consulting resources such as the Consumer Financial Protection Bureau (CFPB) or the Federal Student Aid office can also provide guidance.
For more details about loan management options, see our Loan Modification article and insights on managing Debt Relief. For official guidelines, visit the CFPB website.
