PandaTip: The forbearance agreement template extends a past due loan payment by a number of days to afford the borrower an opportunity to bring the loan current prior to the Lender taking legal action. This is often a cheaper and more amicable alternative to enforcing the collection terms of the original loan agreement.
This forbearance agreement, created on [Agreement.CreatedDate], is entered into by and between [Sender.Company], the Lender, and [Client.Name], the Borrower.
WHEREAS, the Borrower has previously entered into a loan agreement with the Lender, with a principle amount of [Loan.Principle] and an annual interest rate of [Loan.APR].
WHEREAS, the Borrower has failed to adhere to the agreed schedule for repaying said loan, and as a result has defaulted on the loan agreement’s terms,
WHEREAS, the Lender has agreed not to demand immediate payment of the total loan balance in accordance with the existing loan agreement, and has instead opted to grant the Borrower an extended opportunity to bring the loan’s balance current,
THEREFORE, The Borrower and Lender agree to the following terms of this forbearance agreement:
PandaTip: The template extends the past due payment by calendar days, not business days. Be sure that the date suggested by the number of days listed below matches up with the forbearance agreement’s expiration date.
The Lender has agreed to extend the due date of the past due amount on the associated loan agreement by [Extension.Days] days. The Lender agrees to refrain from taking any action designed to demand or collect the loan’s balance prior to [Forbearance.ExpirationDate].
2. Absence of Waiver
PandaTip: This section of the template makes it clear that entering into this forbearance agreement is a courtesy offered to the buyer by the lender, and does not invalidate the original terms of the existing loan agreement, particularly as they relate to right to collect money owed.
This forbearance agreement shall not constitute a waiver of any right or term contained in the original loan agreement documents. The Lender shall continue to enjoy the full legal protections and benefits outlined in the original loan agreement.
The parties signing this forbearance agreement hereby warrant that they are authorized to enter into agreements on behalf of the parties involved in the associated loan agreement.
PandaTip: Both parties should esign this template using the fields below before downloading a copy for their respective records.
By signing below, the Lender and Borrower agree to the terms of this forbearance agreement as an addendum to the existing loan agreement.