Forbearance: What It Is, Types, Example

What Is Forbearance?

By Kristi Waterworth – Updated Dec 13, 2025 at 4:04 PM EST

Key Points

Forbearance allows temporary pause in loan payments when financial hardships arise.
Mortgage forbearance helps avoid foreclosure, with various repayment options post-forbearance.
Student loan forbearance halts payments; unlike deferment, interest still accrues.

Sometimes, regardless of your best efforts, it's just not possible to continue making your loan payments. You might have fallen ill or maybe lost your job, but your late payments just keep getting later and later. Enter forbearance.

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Bills stamped Past Due and Account Closed. — Image source: Getty Images.

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Balloon Payment

A large, final lump sum due at the end of a loan term after smaller regular payments, often requiring refinancing or full payoff.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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