Understanding Loan Terms: Default, Delinquency, Forbearance, and Modification
Repay means to return something, especially money that you have borrowed, in a way that is fair and honest.
Example: "I'll repay the loan next month."
Synonyms: pay back, refund, reimburse, settle.
Antonyms: default, fail, neglect, owe.
2. What does it mean to default on a loan ?
To default on a loan means to fail to make a payment when it is due, or to fail to meet the terms of the loan agreement. This can lead to serious consequences, such as damage to your credit score and legal action.
Example: "If you default on your mortgage, the bank can foreclose on your home."
Synonyms: neglect, owe, fail, miss.
Antonyms: repay, settle, fulfill, honor.
3. What is a delinquency ?
A delinquency is a failure to make a payment or meet an obligation on time. This can apply to things like loan payments, credit card bills, and other debts.
Example: "If you are delinquent on your student loans, you may face penalties and higher interest rates."
Synonyms: default, arrears, overdue, unpaid.
Antonyms: current, paid up, on time, up to date.
4. What is a forbearance ?
A forbearance is a temporary suspension of loan payments or other obligations, often granted in cases of financial hardship. This can give the borrower some breathing room to get back on their feet, but it may also lead to additional fees and interest charges.
Example: "The lender agreed to a forbearance agreement that allowed me to pause my mortgage payments for six months."
Synonyms: reprieve, respite, deferment, suspension.
Antonyms: acceleration, foreclosure, repossession, liquidation.
5. What is a loan modification ?
A loan modification is a permanent change to the terms of a loan, such as a reduction in the interest rate or an extension of the repayment period. This can help the borrower avoid default and stay current on their payments.
Example: "I negotiated a loan modification that lowered my monthly payments and saved me thousands of dollars in interest."
Synonyms: refinancing, restructuring, renegotiation, reamortization.
Antonyms: original terms, standard payment schedule, unchanged loan agreement, no modifications.
I like this
I dislike this
Report a content error
Share
