Banded forbearance
Okay, so imagine you have a piggy bank where you put all your coins. And let's say you want to save up for a toy you really want but you only get 50 cents a day. So you decide to put a rubber band around the piggy bank and you can only take out a few coins each day so you can save up for the toy.
Now, banded forbearance is kind of like that rubber band on your piggy bank. It's when a lender, like a bank, lets you pause or reduce your payments on a loan for a certain amount of time. This can be helpful when you have a hard time paying your bills because of something like losing your job or having unexpected expenses.
But, just like with the rubber band on your piggy bank, there are rules to follow when you use banded forbearance. For example, you can't take out all the coins from your piggy bank at once, and with banded forbearance, you can't just skip all your payments and then catch up later. Instead, you still have to make some payments, just not all of them, and you might have to pay back the skipped payments later on.
Does that make sense, little buddy?
Now, banded forbearance is kind of like that rubber band on your piggy bank. It's when a lender, like a bank, lets you pause or reduce your payments on a loan for a certain amount of time. This can be helpful when you have a hard time paying your bills because of something like losing your job or having unexpected expenses.
But, just like with the rubber band on your piggy bank, there are rules to follow when you use banded forbearance. For example, you can't take out all the coins from your piggy bank at once, and with banded forbearance, you can't just skip all your payments and then catch up later. Instead, you still have to make some payments, just not all of them, and you might have to pay back the skipped payments later on.
Does that make sense, little buddy?