A payment deferral lets you skip one or more payments now and add them to the end of your loan, without penalty or interest charges for missing them.
When you defer a payment, the lender or service provider agrees to move that payment date forward. Instead of paying on the original due date, you pay later—usually at the end of your loan term or after a set period. The skipped payment doesn't disappear; it gets tacked onto what you already owe, and you'll pay it eventually.
The key difference between a deferral and simply not paying is that a deferral is approved in advance. You ask for it, the lender says yes, and both of you have a written agreement about when you'll resume payments. If you just stop paying without asking, that's a missed payment, and it damages your credit score immediately.
Key Takeaways
- A deferral moves your payment to a later date without triggering a late fee or credit damage, but you still owe the full amount.
- You must request a deferral before the payment is due; lenders are not required to grant one, and approval depends on your loan type and account history.
- Interest usually continues to accrue during a deferral on loans like mortgages and student loans, so you pay more total interest over the life of the loan.
- Deferrals work differently across loan types—federal student loans have specific deferral programs, while credit cards and personal loans rarely offer them.
- A deferral is not the same as forbearance, which pauses payments but may stop interest from accruing depending on the loan type.
How a deferral changes what you owe
When you defer a payment, the amount doesn't vanish. On most loans, interest keeps building during the deferral period. That means when you resume payments, you'll owe more than you would have if you'd paid on schedule.
For example, on a mortgage or auto loan, interest accrues daily. If you defer a $1,500 payment for three months, you'll still owe that $1,500 plus the interest that accumulated during those three months. Some lenders add the deferred payment and accrued interest to your final payment; others extend your loan term so you make the same monthly payment but for longer.
Federal student loans are different. Depending on the type of deferral, interest may or may not accrue. Subsidized loans stop accruing interest during certain deferrals; unsubsidized loans accrue interest no matter what. You need to know which type you have before you request a deferral, because the cost difference is real.
Who can grant a deferral and when to ask
Your lender or service provider decides whether to grant a deferral. Banks, credit unions, mortgage companies, and loan servicers all have their own policies. Some have formal deferral programs; others handle requests case by case. Credit card companies rarely offer deferrals at all—they're more likely to offer a hardship plan that reduces your interest rate instead.
You must request a deferral before the payment is due. Call or log into your account and ask to speak with a representative about deferral options. Have your account number ready and be prepared to explain why you need the deferral. Some lenders ask for proof of hardship—a job loss letter, medical bill, or income statement.
The lender will tell you whether you may have access to, how many payments you can defer, and what happens to interest during that time. Get the agreement in writing. If the lender says yes verbally but doesn't send you a confirmation, follow up by email and ask them to confirm the terms in writing.
Deferrals on federal student loans
Federal student loans have two formal deferment programs: economic hardship deferment and unemployment deferment. You request these through your loan servicer, and if you meet the criteria, interest stops accruing on subsidized loans during the deferment period.
Economic hardship deferment covers situations like job loss, medical hardship, or income below 150% of the poverty line. Unemployment deferment requires proof that you're receiving unemployment benefits or are unable to find full-time work. Each deferment lasts up to three years, and you can request it multiple times over the life of your loan.
If you don't meet the criteria for deferment, your servicer may offer forbearance instead. Forbearance pauses your payments but interest accrues on all loan types. It's a backup option when deferment isn't available, and it lasts three to six months at a time.
Deferrals on mortgages and auto loans
Mortgage and auto loan deferrals work similarly: you skip one or more payments, and those payments get added to the end of your loan or bundled into a larger payment later. Interest continues to accrue the entire time.
Most lenders allow one to three months of deferral, though some may grant longer periods during documented hardship. After the deferral period ends, you resume your regular payment plus whatever arrangement you made for the deferred amount. Some lenders spread it across the remaining loan term; others ask for a lump sum at the end.
The catch: if you defer a mortgage payment, your loan term extends, which means you pay more total interest. A 30-year mortgage that includes a three-month deferral effectively becomes a 30-year-and-three-months mortgage. On a $300,000 loan at 6% interest, that extra three months can cost you several hundred dollars in additional interest.
What happens to your credit score during a deferral
A deferral that you arrange in advance does not show up as a missed payment on your credit report. Your credit score should not drop because of an approved deferral. However, the deferral itself may appear on your credit report as a notation—something like "payment deferred" or "account in deferment"—which some lenders view as a sign of financial stress.
The protection only holds if you stick to the agreement. If you defer a payment and then miss the next scheduled payment after the deferral ends, that missed payment will be reported and will damage your score. Make sure you understand when your regular payments resume and set a reminder so you don't accidentally miss the first payment after the deferral period ends.
Deferral vs. forbearance vs. skipping a payment
These three options sound similar but work very differently. A deferral is an agreement to move a payment to a later date; interest usually accrues, and you pay the full amount eventually. Forbearance pauses payments temporarily, and interest accrues on all loans; it's often used when deferral isn't available. Skipping a payment without permission is a missed payment, which triggers a late fee, damages your credit, and may accelerate your loan (meaning the lender can demand the full balance immediately).
If you're in financial difficulty, deferral is the best option if your lender offers it, because it's pre-approved and won't hurt your credit. If deferral isn't available, forbearance is the next step. Never skip a payment without asking first.
Frequently Asked Questions
Can I defer a payment on a credit card?
Most credit card companies do not offer deferrals. Instead, they may offer a hardship plan that reduces your interest rate or extends your payment term. Call your card issuer and ask about hardship options if you're struggling to pay. Some issuers will work with you; others will not.
Does a deferral hurt my credit score?
An approved deferral should not damage your credit score because it's not reported as a missed payment. However, it may appear on your credit report as a notation, and some lenders view that as a sign of financial stress. The damage comes only if you miss a payment after the deferral ends.
What if the lender denies my deferral request?
If your lender denies a deferral, ask what other options are available—forbearance, a payment plan, or a temporary interest rate reduction. If you're struggling, explain your situation clearly and ask what they can do. If they still say no, you may have other options depending on your loan type and state laws.
Do I still pay interest during a deferral?
On most loans—mortgages, auto loans, and unsubsidized student loans—interest accrues during a deferral. On subsidized federal student loans, interest may stop accruing depending on the type of deferment. Always ask your lender whether interest will accrue before you agree to a deferral.
How long can I defer a payment?
The length of a deferral depends on your lender and loan type. Most lenders allow one to three months; federal student loans allow up to three years of deferment. Ask your lender what the maximum deferral period is for your account before you request one.