Forbearance is a type of agreement between a borrower and a lender that allows the borrower to temporarily postpone or reduce their loan payments. This can be a useful option for borrowers who are experiencing financial difficulties and are unable to make their regular payments. The terms of forbearance vary depending on the situation, but it may involve the borrower making reduced payments for a certain period of time or postponing payments for a set period of time, after which the borrower must resume making the regular payments or repay the missed payments.
Forbearance agreements are commonly used for mortgages and student loans, but can also apply to other types of loans. They are not meant to be permanent solutions, and the borrower is still responsible for repaying the loan in full over the long-term. It's important to keep in mind that while forbearance can provide temporary relief, it also means that interest will continue to accrue on the loan.