Deferring a payment means postponing what you owe right now to a later date, without erasing the debt
When you defer a payment, you are asking your lender or creditor to let you skip a scheduled payment this month (or this quarter, depending on the loan). The payment does not disappear — it gets moved to a later date, usually added to the end of your loan or spread across future payments. You still owe the full amount; you are just changing when you pay it.
The key difference between deferral and forgiveness is that forgiveness erases part or all of what you owe, while deferral only delays it. A deferred payment is a temporary pause, not a reduction. This matters because it affects how much you will ultimately pay and how long your loan lasts.
Key Takeaways
- Deferring a payment postpones what you owe to a later date but does not erase the debt or reduce the amount.
- Interest usually continues to accrue during a deferral period, meaning you may pay more total interest over the life of the loan.
- Deferral is different from forbearance, which is a temporary pause on payments, and from forgiveness, which erases debt.
- You typically need to contact your lender directly to request a deferral, and approval depends on your loan type and the lender's policies.
- Deferred payments are usually added to the end of your loan term or spread across your remaining payments.
How interest works during a deferral
Whether interest continues to accrue during your deferral depends on the type of loan. On most consumer loans — car loans, personal loans, credit cards — interest keeps building even when you are not making a payment. That means you will pay more total interest by the time the loan is fully repaid.
Federal student loans are an exception in some cases. If you have subsidized federal student loans and you are in deferment, the government pays the interest for you during that period. With unsubsidized loans, interest accrues and gets added to your balance. Private student loans almost always accrue interest during deferral.
Before you request a deferral, ask your lender explicitly: "Will interest continue to accrue during the deferral period?" The answer changes how much the deferral actually costs you.
Deferral versus forbearance versus forgiveness
These three terms sound similar but mean very different things. Deferral moves your payment to a later date. Forbearance is a temporary pause on payments — usually shorter than deferral — where you stop paying but still owe the debt. Forgiveness erases part or all of what you owe; the debt is gone.
Forbearance is often used for federal student loans when you are in financial hardship. It typically lasts a few months. Deferral is often longer and is common with student loans, mortgages, and some personal loans. Forgiveness programs exist mainly for student loans (like Public Service Loan Forgiveness) and some government information programs.
If a lender offers you a choice between these options, ask how each one affects your total repayment amount and your credit report. The cheapest option is not always the one that sounds the most helpful.
What happens to your credit report during a deferral
A deferral that you arrange in advance with your lender — before you miss a payment — typically does not harm your credit score. The lender reports it as an agreed-upon arrangement, not as a missed payment. Your credit report will show the deferral, but it will not show a delinquency.
If you stop paying without contacting your lender first, that is a missed payment, and it will damage your credit even if you later negotiate a deferral. The damage is already done. This is why contacting your lender before you fall behind is important.
After the deferral period ends and you resume payments, your credit will begin to recover, especially if you make all future payments on time. The deferral itself stays on your report, but it becomes less important to lenders as time passes.
How to request a deferral from your lender
Contact your lender directly — by phone, mail, or their online account portal — and ask whether deferral is an option for your loan type. Have your account number and loan details ready. Explain your situation briefly: you are experiencing a temporary hardship and want to know what options are available.
The lender will tell you whether deferral is possible, how long it can last, whether interest accrues, and what happens when the deferral period ends. Some lenders have formal deferral programs with set rules; others handle requests case by case. Ask for the terms in writing before you agree.
If your first request is denied, ask what conditions would make you may be able to access. Some lenders require you to be current on payments before they will grant a deferral, while others will work with you even if you are behind. Asking directly is the only way to know.
When deferral makes sense and when it does not
Deferral makes sense when your hardship is temporary — you expect to have income again in a few months, or you are waiting for a specific event (a job starting, a tax refund, an inheritance). If you defer a payment and then have no way to pay it when it comes due, you have only delayed the problem.
Deferral does not make sense if you are in a permanent financial decline and will not be able to afford the deferred payment later. In that case, you might be better served by forbearance, a loan modification that lowers your payment permanently, or in some cases, exploring whether forgiveness programs exist for your loan type.
Deferral also costs more if interest accrues during the deferral period. If you can scrape together even a partial payment to cover interest, you will save money in the long run. Ask your lender whether they accept interest-only payments during a deferral.
What happens when the deferral period ends
When your deferral period ends, your deferred payment is due. Most commonly, it is added to your regular monthly payment for the next several months, or it is tacked onto the end of your loan, extending your payoff date. Some lenders let you choose which arrangement you prefer.
If you cannot afford the deferred payment when it comes due, contact your lender again before you miss it. Some lenders will grant a second deferral, though this is not may provide. Others may offer a loan modification instead, which permanently changes your payment amount or loan term.
Plan ahead for the end of your deferral period. If you deferred a payment in month three, mark your calendar for when that payment will be due. Do not be surprised by it when it arrives.
Frequently Asked Questions
Does deferring a payment hurt my credit score?
A deferral you arrange with your lender in advance does not hurt your credit. It shows as an agreed arrangement, not a missed payment. However, if you stop paying without contacting your lender first, that missed payment will damage your credit even if you later negotiate a deferral.
Can I defer a payment on any type of loan?
Deferral is most common on student loans and mortgages. Some car loans and personal loans allow deferral, but not all. Credit card companies rarely offer deferral; they are more likely to offer forbearance or a hardship plan. Ask your specific lender whether deferral is an option for your account.
Will I pay more interest if I defer a payment?
Usually yes, unless you have a subsidized federal student loan where the government covers interest during deferment. On most other loans, interest continues to accrue during the deferral period, so you will pay more total interest by the time the loan is repaid. Ask your lender directly whether interest accrues during your deferral.
What is the difference between deferral and skipping a payment?
Skipping a payment without permission is a missed payment that damages your credit and may trigger late fees. Deferral is an agreement with your lender to postpone the payment. Always contact your lender to arrange a deferral rather than straightforward not paying.
Can I defer a payment more than once?
Some lenders allow multiple deferrals; others allow only one. The rules vary by lender and loan type. If you think you will need more than one deferral, ask your lender upfront what their policy is and whether there are limits on how many times you can defer.