Deferring a payment means postponing what you owe to a later date without canceling the debt
When you defer a payment, you ask your lender or creditor to let you skip a scheduled payment now and move it to the end of your loan or to a future date. The debt does not disappear—you still owe the full amount. The payment you skip gets added to what you already owe, usually at the end of the loan term, or it gets rolled into your next payment. Interest may continue to accrue during the deferment period, depending on the type of loan and the agreement you make with your lender.
Deferment is different from forgiveness (where debt is erased) and different from forbearance (where you temporarily reduce or pause payments but keep accruing interest). Deferment is also not the same as a payment plan, which spreads out what you owe into smaller chunks over time. With deferment, you are buying time by moving a payment forward, not breaking it into pieces.
Key Takeaways
- Deferring a payment postpones it to a later date, but you still owe the full amount plus any interest that accrues during the deferment period.
- The deferred payment is usually added to the end of your loan term or rolled into your next scheduled payment, depending on your lender's terms.
- Federal student loans, private student loans, mortgages, and some auto loans allow deferment, but credit cards and personal loans typically do not.
- Deferment can damage your credit score if the lender reports the missed payment to credit bureaus, even though you have an agreement to defer.
- You must contact your lender before the payment is due to request deferment; waiting until after the due date turns it into a late payment.
How deferment works with different types of loans
Federal student loans offer the most straightforward deferment. If you have a Direct Loan or Federal Family Education Loan (FFEL), you can request deferment if you are unemployed, in school at least half-time, serving in the military, or facing economic hardship. During deferment, you do not make payments, but interest on unsubsidized loans continues to accrue. When deferment ends, the unpaid interest is either capitalized (added to your principal balance) or you resume regular payments.
Private student loans rarely offer deferment as a formal option. Some lenders allow you to request a temporary pause, but they call it forbearance instead, and the terms vary widely. You must contact your specific lender to learn what they offer.
Mortgages can be deferred, but only in specific circumstances. During the COVID-19 pandemic, many homeowners were able to defer payments through loan modification programs. Today, deferment is less common for mortgages, but some lenders allow it if you are facing a temporary hardship. The deferred amount is usually added to the end of the loan or rolled into a modified payment schedule.
Auto loans sometimes allow deferment, but it depends on your lender and your loan agreement. Some lenders will let you skip one or two payments and add them to the end of the loan. Others do not offer this option at all. Credit cards and personal loans almost never allow deferment; if you miss a payment, it is reported as late, not deferred.
What happens to your credit score when you defer a payment
Deferment can hurt your credit score, even though you have an agreement with your lender. If your lender reports the deferred payment to the credit bureaus (Equifax, Experian, and TransUnion) as a missed or late payment, it will show up on your credit report and lower your score. The damage is usually smaller than a true late payment, because the lender knows you are in deferment, but it still appears as negative information.
Some lenders do not report deferred payments to credit bureaus if you have a formal deferment agreement in place. Before you request deferment, ask your lender directly: "Will this deferment be reported to the credit bureaus?" Get the answer in writing if possible. If they say it will be reported, you can decide whether deferment is worth the credit hit compared to other options like forbearance or a payment plan.
The credit impact also depends on how long the deferment lasts. A single deferred payment may have minimal effect. A deferment that lasts several months will show up more prominently on your report and take longer to recover from.
Interest and fees during deferment
Interest behavior during deferment depends on the loan type. On federal student loans, interest on unsubsidized loans continues to accrue during deferment. Interest on subsidized loans does not accrue. When deferment ends, you have two choices: pay the accrued interest immediately, or let it capitalize (get added to your principal balance). If you capitalize, you will pay interest on that interest for the rest of the loan.
On mortgages and auto loans, interest typically continues to accrue during deferment. The deferred payment is not forgiven—it is postponed. When the deferment period ends, you still owe that payment plus the interest that built up while you were not paying.
Late fees are usually waived during a formal deferment period, as long as you have a written agreement with your lender. However, if you miss a payment without requesting deferment first, your lender will charge a late fee before you can set up deferment. This is why timing matters: contact your lender before the payment is due, not after.
How to request deferment from your lender
Contact your lender as soon as you know you cannot make a payment. Do not wait until the payment is due. Call the customer service number on your bill or statement, or log into your online account to find the deferment request option. Some lenders have online forms; others require a phone call or written request.
Be prepared to explain why you need deferment. For federal student loans, you will need to document your reason (unemployment, school enrollment, military service, or hardship). For other loans, lenders want to know whether your situation is temporary or ongoing. If you say you cannot pay for one month, they may defer one payment. If you say you are facing a longer hardship, they may offer a longer deferment or suggest a payment plan instead.
Ask for a written confirmation of the deferment agreement. This should include the payment being deferred, the new due date, whether interest will accrue, whether it will be reported to credit bureaus, and any fees involved. Keep this document for your records. If your lender later claims you missed a payment, you have proof that deferment was agreed to.
Deferment versus forbearance versus payment plans
These three options sound similar but work differently. Deferment postpones a payment to a later date; the payment is not forgiven, and interest may accrue. Forbearance temporarily reduces or pauses payments, usually for a set period (three to six months). Interest almost always accrues during forbearance, and the accrued interest is capitalized at the end. Payment plans do not postpone or pause payments; instead, they break your debt into smaller monthly amounts spread over a longer period.
If you need relief for one or two months, deferment is often the fastest option. If you need relief for several months and want to avoid credit damage, forbearance may be better, though it costs more in interest. If you need to lower your monthly payment permanently, a payment plan or loan modification is the right choice.
Federal student loans offer all three options. Private loans and mortgages may offer only one or two. Ask your lender which options are available to you before you decide.
What happens when deferment ends
When your deferment period ends, your regular payment resumes. The deferred payment is due according to the terms you agreed to—either added to your next payment, added to the end of your loan, or due on a specific date your lender specified. If you cannot afford the resumed payment, contact your lender again before it is due. Do not assume you can defer again; each deferment request is separate, and lenders limit how many times you can defer.
If you capitalized interest during deferment (on student loans), your principal balance is now higher, which means your remaining payments will be higher or your loan will take longer to pay off. Review your loan statement after deferment ends to confirm the new balance and payment amount.
If deferment was reported to credit bureaus, it will remain on your credit report for seven years from the date of the missed payment. However, its impact on your score fades over time, especially if you make all payments on time after deferment ends.
Frequently Asked Questions
Can I defer a payment on a credit card?
No. Credit card companies do not offer deferment. If you miss a payment, it is reported as late immediately. However, you can contact your card issuer to request a hardship program, which may lower your interest rate or allow you to pause payments temporarily through forbearance. This is different from deferment and will still affect your credit score.
Will deferring a payment stop my loan from going into default?
Yes, if you have a formal deferment agreement in place before the payment is due. Default occurs when you miss a payment and do not contact your lender. Deferment prevents default because you have an agreement. However, if you defer and then miss the deferred payment when it comes due, default can still happen.
Can I defer multiple payments at once?
It depends on your lender and loan type. Federal student loans allow deferment for extended periods if you meet the criteria. Most other lenders allow deferment of one or two payments at a time. Ask your lender how many payments can be deferred and whether there is a limit on how many times you can defer in a year.
What if I defer a payment and then get a tax refund or bonus?
You can pay the deferred amount early if you want to. There is usually no penalty for paying off a deferred payment ahead of schedule. Contact your lender to confirm there are no prepayment penalties, then make the payment. This will reduce the total interest you pay and may help your credit score recover faster.
Does deferment show up on my credit report?
It may, depending on your lender. Some lenders report deferment as a deferred payment; others do not report it at all if you have a formal agreement. Before you defer, ask your lender whether it will appear on your credit report. Get the answer in writing so you know what to expect.