U.S. Mortgage Index

Repayment plan

Definition

A repayment plan is a servicing arrangement that lets a borrower catch up past-due amounts by paying extra over a series of future payments. It is not automatic and not the same as deferment.

In plain English

When a loan is behind, a servicer may agree to a plan that spreads the missed amount over coming months. The borrower stays in the existing loan; the schedule of what is due changes by agreement. Deferment pauses or reduces payments for a time. A repayment plan is about catching up. Not every servicer offers the same options.

Technical definition

Consumer glossaries describe a repayment plan as a way to pay past-due amounts over time. USDA handbook uses are program context.

Why it matters

Hardship conversations need this word kept separate from deferment, modification, and foreclosure procedure.

Sources reviewed

Important note

This page is not legal advice and does not say every servicer must offer a repayment plan.