Loan forbearance: What it is, why it matters, and how to get it

What is loan forbearance?

Loan forbearance is a type of loan modification that allows you to temporarily stop making payments on your loan. During forbearance, you’re still responsible for the full amount of your loan, but your payments are deferred until the end of the forbearance period.

There are two main types of loan forbearance:

• General forbearance: This type of forbearance is available to most borrowers. It can be granted for a variety of reasons, such as financial hardship, medical emergency, or military service.
• Economic hardship forbearance: This type of forbearance is available to borrowers who are experiencing financial hardship due to a job loss, medical emergency, or other economic event.

Why is loan forbearance important?

Loan forbearance can be a helpful option if you’re struggling to make your loan payments. It can provide you with a temporary reprieve from your payments, giving you time to get back on your feet financially.

Forbearance can also help you avoid defaulting on your loan. Defaulting on your loan can have serious consequences, such as damage to your credit score, wage garnishment, and even foreclosure.

How to get loan forbearance

To get loan forbearance, you’ll need to contact your loan servicer. You’ll need to provide proof of your financial hardship, such as a letter from your employer or doctor.

Your loan servicer will review your request and let you know if you’re eligible for forbearance. If you’re approved, you’ll be given a forbearance agreement that you’ll need to sign.

Conclusion

Loan forbearance can be a helpful option if you’re struggling to make your loan payments. However, it’s important to understand the terms and conditions of forbearance before you sign up.

Recommendations

• If you’re considering forbearance, be sure to talk to your loan servicer first. They can help you determine if forbearance is the right option for you. For more information.
• Be sure to make your payments on time when the forbearance period ends.
• There are other options available to help you manage your debt, such as loan consolidation or debt settlement. If you’re struggling to make your payments, talk to a financial advisor to see if one of these options is right for you.