Overview: Borrowers sometimes find themselves in over their heads. One way to avoid foreclosure or default is to use a workout program. Debt workout programs are agreements between a troubled borrower and a lender.
Types of Workouts: Some possible workouts include:
- Temporary reduction in your interest rate (APR)
- Temporary forbearance - reducing or skipping a few payments
- Adding missed payments to your loan balance (so you catch up on them later)
- Extending the term of your loan
- Set up a repayment schedule
When to Ask About Workouts: You should contact your lender as soon as you see trouble on the horizon. By being proactive, you keep more options open.
How to Get a Workout: To set up a workout program, call your lender. They need to approve the program and agree on all the details.
