Repayment Plan Law and Legal Definition
Repayment plan is a written agreement between the lender and the borrower to make additional payments to pay down past due amounts along with regular scheduled payments. This type of agreement is entered mainly due to the unforeseen circumstances in which the borrower becomes unable to pay. The repayment plan will usually be a modification made to the repayment terms of an existing loan.
Usually, in case of any arrears of payment the credit counseling services are availed by the borrower. According to this system a deposit need to be made to the credit counseling service. This deposit will be used to payoff the creditors according to the payment schedule made by the counseling system.