what is forbearance 
the term forbearance refers to the temporary postponement of loan payments typically for a mortgage or student loan lenders and other creditors grant forbearance as an alternative to forcing a property into foreclosure or leaving the borrower to default the companies that hold loans and their insurers are often willing to negotiate forbearance agreements because the losses caused by foreclosures or defaults typically fall on them understanding forbearancealthough it is primarily used for student loans and mortgages forbearance is an option for any loan it gives the debtor extra time to repay what they owe this helps struggling borrowers and benefits the lender who frequently loses money on foreclosures and defaults after paying the fees loan servicers those that collect payments but do not own loans may be less willing to work with borrowers on forbearance relief because they do not bear as much financial risk the terms of a forbearance agreement are negotiated between borrowers and lenders the chances of getting an arrangement depend partly on the likelihood that the borrower can resume monthly payments once the forbearance period is over the lender may approve a total reduction of the borrower s payment or only a partial reduction depending on the extent of the borrower s need and the lender s confidence in the borrower s ability to catch up at a later date in some cases the lender may grant the borrower one of several options these include forbearance may be mandated by law for example the federal coronavirus aid relief and economic security cares act passed and signed into law in march 2020 to address the economic fallout from covid 19 included provisions for student loan forbearance the law also made provisions for mortgage payment forbearance for struggling homeowners during the pandemic 1receiving forbearance doesn t relieve you of your financial responsibility so you must still make up for the missed payments once your agreement ends 