Payment Holiday / Moratorium
A break period allowing borrowers to pause or defer payments.
Detailed Description
Payment Holiday / Moratorium
What is a payment holiday?
A payment holiday is a temporary suspension of loan repayments offered by lenders to borrowers facing financial difficulties.
What is the primary purpose of a payment holiday?
The primary purpose is to provide financial relief to borrowers during challenging situations, helping to prevent defaults and support financial stability.
How long can a payment holiday last?
The duration can vary from a few months to a year, depending on lender policies and the borrower's situation.
Will a payment holiday affect my credit score?
When properly structured, a payment holiday should not negatively impact your credit score, as lenders report it as 'in forbearance' instead of delinquent.
What should I do to apply for a payment holiday?
To apply, contact your lender directly, fill out an application form, and provide supporting documentation to demonstrate financial hardship.