Strategic Payment Deferrals: Reducing Delinquency, Supporting Borrowers

Payment Deferral Programs: Building Smart, Flexible Options
We help you design and deploy effective payment deferral programs that reduce near-term delinquency, genuinely support borrowers through hardship, and preserve long-term portfolio health.

Key Components & Design Considerations
We tailor deferral solutions to fit your products and operational capacity:

• Deferral Structure: Define whether payments are skipped, moved to the end, or re-amortized, including eligible deferral months.
• Eligibility Rules: Create clear program parameters based on days delinquent, hardship type, credit score, or prior program usage.
• Loan Types & Complexity: Adjust designs based on amortizing (e.g., auto) or revolving (e.g., credit card) loan characteristics.
• Compliance & Disclosures: Ensure clear, timely, and compliant borrower communications in line with Reg Z, Reg F, and UDAP/UDAAP expectations.
• Accounting Treatment: Collaborate with finance to ensure proper classification under CECL, TDR, or internal policy.

Operational Levers & Tools
We help you activate and manage deferrals efficiently:

• Automated Intake: Build digital workflows for borrowers to request deferrals with minimal agent involvement.
• Agent Support: Design robust support tools for phone-based hardship intake and borrower education
• Tracking & Monitoring: Implement dashboards to monitor enrollments, re-defaults, and overall portfolio impact.
• End-of-Term Planning: Coordinate clear plans for loan maturity, balloon payments, or extensions following deferral.

Why It Matters: Value to Your Bank
Effective deferral programs deliver significant benefits:

• Reduce Delinquency Roll Rates: Provide immediate payment relief, preventing accounts from escalating.
• Avoid Unnecessary Charge-Offs: Preserve loan value and minimize collection escalations.
• Preserve Customer Relationships: Maintain goodwill and reputation during financial hardship.
• Demonstrate Regulatory Compliance: Provide evidence of a fair and responsive loss mitigation process.

Risks & Controls
We help you minimize potential risks through built-in controls:

• Prevent Misuse: Ensure programs are not misused or misunderstood by borrowers through clear communication and controls.
• Audit Execution: Rigorously audit operational execution and proper accounting treatment.
• Track Payment Delays: Monitor cumulative payment delays and design clear re-entry strategies to mitigate risk.

How We Partner to Build It
We work with your strategy, servicing, legal, and finance teams to design deferral programs that precisely fit your products and regulatory profile. We help define program logic, build robust tracking and reporting infrastructure, and embed governance controls. Whether you're launching a new offering or refining an existing one, we help you operationalize it quickly, responsibly, and at scale.

Why Spinnaker?
We’re former operators, risk leaders, and strategists in the banking industry who’ve been in your shoes. Every consultant on our team has over 10 years of real-world experience leading credit risk, collections, compliance, and analytics functions at banks and fintechs. We have managed through the last recession and the pandemic. We know what works because we've done the work. That’s why our solutions are practical, actionable, and designed to perform in the real world.

Contact us today for an exploratory conversation: Shawn.Sweeney@SpinnakerConsultingGroup.com