A deferred payment lets you skip one or more payments now and add them to the end of your loan or contract, rather than paying them back in a lump sum or losing the money.
When you defer a payment, the lender or creditor agrees to postpone what you owe for a set period—usually 30 days to several months. Instead of paying that amount immediately or forfeiting it, you push it to later in your loan term. The payment doesn't disappear; it gets tacked onto your remaining balance or added as new payments at the end.
Deferral is different from forgiveness (where the debt goes away) and different from a one-time skip (where you simply don't pay that month and the account goes delinquent). A true deferral is a formal agreement between you and the creditor, documented in writing or confirmed in your account settings.
Key Takeaways
- Deferred payments are added to your loan balance or tacked onto the end of your payment schedule, so you pay them eventually—usually with interest.
- Deferral requires the creditor's permission and is typically offered for student loans, mortgages, auto loans, and some personal loans, but not all creditors allow it.
- Your credit report may show the deferral, and interest often continues to accrue during the deferral period, increasing what you ultimately owe.
- You must request deferral before the payment is due; once a payment is late, you are in delinquency, not deferral, and the damage to your credit is already done.
How deferral changes what you owe
When you defer a payment, the amount you skip doesn't vanish. Most commonly, it gets added to your loan balance. If you defer a $500 car payment, your remaining loan balance increases by $500. You then pay interest on that $500 for however long it takes to pay it off.
Some lenders instead extend your payment schedule: instead of making your final payment in 60 months, you now make it in 61 or 62 months. The deferred payment becomes a new payment at the end. Either way, you are paying more total interest because you are borrowing the money for longer.
A few creditors—particularly some mortgage servicers during hardship—may allow you to roll the deferred amount into a balloon payment at the end of the loan, or to spread it across your remaining payments without adding interest. These terms vary widely and depend on the type of loan and the lender's policy. Always ask what happens to the deferred amount before you agree to the deferral.
Which debts can be deferred and which cannot
Federal student loans have formal deferment and forbearance programs built into the loan terms. You can defer payments for economic hardship, unemployment, or enrollment in school, though interest usually keeps accruing. Private student loans may offer deferral, but it is not may provide and depends on the lender.
Mortgages can be deferred, especially during documented hardship. Many servicers offer mortgage forbearance programs (a form of deferral) where you skip payments for a set period and then resume normal payments or add the skipped amount back into your loan. The deferred amount is typically added to the end of the loan or rolled into a new payment plan.
Auto loans can often be deferred, but the terms depend on your lender. Some allow one deferral per loan; others may allow more. Interest continues to accrue, and the deferred payment is usually added to your balance.
Credit card payments are rarely deferred in the formal sense. Credit card companies may offer hardship programs that lower your interest rate or pause collections, but they do not typically allow you to skip a payment and add it to the end. Missing a credit card payment triggers delinquency, not deferral.
Personal loans vary by lender. Some allow deferral; many do not. Check your loan agreement or contact your lender to ask whether deferral is an option.
How deferral affects your credit report
A formal deferral—one you request and the lender approves—typically does not damage your credit score the way a late payment does. The account remains in good standing during the deferral period. However, the deferral itself may appear on your credit report as a notation, and some lenders report it to the credit bureaus.
The key difference: if you skip a payment without permission, it is reported as late or delinquent after 30 days, and your credit score drops. If you arrange a deferral in advance, the payment is not late, and the account does not go delinquent. Your score may not take a hit at all, though some lenders do report deferrals in a way that lenders can see.
After the deferral period ends and you resume payments, the account returns to normal reporting. There is no lasting mark on your credit history if the deferral was handled correctly.
When to request a deferral and how to do it
Request deferral before the payment is due. Once a payment is late, you have moved into delinquency, and deferral is no longer an option—you are now dealing with a missed payment, not a postponed one. Contact your lender or servicer as soon as you know you cannot make the payment.
Most lenders have a customer service line or online account portal where you can request deferral. For federal student loans, you can request deferment or forbearance through your loan servicer's website or by phone. For mortgages, contact your servicer directly. For auto loans and personal loans, call the lender's customer service number.
Be prepared to explain why you need the deferral—job loss, medical emergency, temporary income reduction. Lenders are more likely to approve deferral if you have a documented reason and a history of on-time payments. Ask the lender to confirm the deferral in writing, including the deferral period, what happens to the deferred amount, and when your next payment is due.
The cost of deferring a payment
Deferral is not free. During the deferral period, interest usually continues to accrue on your loan balance. If you defer a $500 payment on a car loan at 6% annual interest, you are paying interest on that $500 for an extra month (or however long the deferral lasts). That interest gets added to what you owe.
On federal student loans, subsidized loans do not accrue interest during deferment, but unsubsidized loans do. Private student loans almost always accrue interest during deferral. On mortgages, interest continues to accrue, and the deferred amount is added to your principal balance.
Over the life of a long-term loan like a mortgage, deferring even a few payments can add hundreds of dollars in extra interest. Calculate the cost before you agree: ask your lender how much interest will accrue during the deferral period and what your new payment amount or loan term will be afterward.
Deferral versus forbearance, hardship programs, and payment plans
Deferral and forbearance are similar but not identical. Forbearance is a temporary pause on payments, usually offered during hardship, and the deferred amount is typically added to the end of the loan. Deferment is the formal term used for student loans and means the same thing: you skip payments and they are added later. Both involve interest accrual (except on subsidized federal student loans during deferment).
A hardship program is broader. It may include deferral, but it can also include interest rate reduction, payment reduction, or loan modification. Hardship programs are common for mortgages and some personal loans.
A payment plan is different: it is a formal agreement to pay a debt you have already missed. If you have fallen behind, the lender may offer a plan to catch up—for example, paying half your normal payment for three months, then resuming full payments. A payment plan addresses past-due debt; deferral prevents it.
What to do if your deferral request is denied
If your lender denies deferral, ask why. Some lenders have strict policies and do not offer it. Others may deny it if your account is already delinquent, if you have deferred payments recently, or if you do not meet their hardship criteria.
If deferral is not available, ask about alternatives: a temporary payment reduction, a forbearance period, a loan modification, or a hardship program. Some lenders will work with you even if formal deferral is not an option. If the lender will not negotiate, you may need to explore other options: a personal loan to cover the payment, a payment from savings, or a conversation with a credit counselor about your overall situation.
Do not simply skip the payment hoping the lender will accept it later. Once a payment is 30 days late, it is reported to the credit bureaus, and your credit score drops. At that point, you are dealing with delinquency, not deferral, and the damage is harder to undo.
Frequently Asked Questions
Does deferring a payment hurt my credit score?
A formal deferral that you request and the lender approves does not hurt your credit score because the account remains in good standing. However, if you skip a payment without permission, it is reported as late after 30 days and your score drops. Always request deferral before the payment is due.
Can I defer multiple payments in a row?
It depends on the lender. Some allow only one deferral per loan; others allow multiple deferrals if you have documented hardship. Federal student loans allow multiple deferment periods. Ask your lender about their policy before you defer a second payment.
What happens if I can't pay the deferred amount when it comes due?
If you cannot pay the deferred amount when it is added back into your payment schedule, contact your lender immediately. You may be able to request another deferral, a payment plan, or a loan modification. Do not ignore the payment; that will trigger delinquency and damage your credit.
Is deferral the same as skipping a payment?
No. Skipping a payment without permission is delinquency and damages your credit. Deferral is a formal agreement with your lender to postpone the payment and add it later. Always get written confirmation of a deferral before you skip a payment.
Do I still owe interest during a deferral?
Usually yes, except on subsidized federal student loans during deferment. Interest accrues on mortgages, auto loans, private student loans, and most personal loans during deferral. Ask your lender how much interest will accrue before you agree to defer.