You can defer a car payment, but it means postponing it, not erasing it
Deferring a car payment means pushing your next payment to a later month instead of paying it on the date it is due. The payment does not disappear — your lender adds it to the end of your loan, so you will owe it eventually. Most lenders allow one or two deferrals per year, though the rules vary by lender and by your loan agreement. You typically have to ask before the payment is due, not after, and you usually need a reason — job loss, medical emergency, or temporary income drop — though some lenders are more flexible than others.
Deferring is different from skipping a payment without permission. If you skip a payment, your lender reports it to credit bureaus and it damages your credit score. A deferral, when done through your lender, does not show up as a missed payment because you and your lender agreed to it in advance.
Key Takeaways
- A deferral postpones your payment to a later month; the payment is added to the end of your loan rather than forgiven.
- You must contact your lender before your payment is due to request a deferral, not after you have already missed it.
- Most lenders allow one or two deferrals per year, but the number and terms depend on your specific loan agreement.
- A deferral agreed to in advance does not hurt your credit score, but skipping a payment without permission does.
- Interest may continue to accrue during the deferral period, meaning you will owe more by the time the deferred payment comes due.
How to request a deferral from your lender
Contact your lender as soon as you know you cannot make a payment. Call the customer service number on your loan statement or bill, or log into your online account to see if deferral is an option you can request yourself. Some lenders let you defer through their website or app; others require a phone call.
When you call, explain your situation briefly — you do not need to provide extensive documentation, though some lenders ask for proof of hardship. Be clear about which payment you want to defer and ask the lender to confirm in writing when the new payment date will be and whether interest will accrue during the deferral period. Write down the name of the person you spoke with and the date of the call.
If your lender denies your deferral request, ask whether they offer a loan modification, a temporary payment reduction, or a forbearance agreement instead. These are not the same as a deferral, but they may help you avoid missing a payment.
What happens to interest and your loan term
During a deferral, interest usually continues to accrue on your loan balance. This means the amount you owe grows even though you are not making a payment. When your deferred payment comes due, you will owe the original payment amount plus the interest that built up during the deferral period.
Your loan term also extends. If you had 48 months left on your loan and you defer one payment, you now have 49 months left. This means you will be paying on the loan longer and will pay more interest overall. Some lenders cap how many months a loan can be extended through deferrals, so ask about that limit when you request the deferral.
When a deferral makes sense and when it does not
A deferral works best when your hardship is temporary. If you lost your job but expect to find work within a month or two, deferring one or two payments gives you breathing room without damaging your credit. If you have a medical emergency that will strain your budget for a few weeks, a deferral can prevent a missed payment during that period.
A deferral is less helpful if your income problem is long-term. If you have lost your job with no prospect of new income soon, deferring payments only delays the problem — you will still owe the deferred amount later, and you will still be short on money. In that situation, you might be better served by exploring loan modification, refinancing, or selling the car.
Deferrals also cost you money through accrued interest and a longer loan term. If you have savings or can borrow from family, paying on time may be cheaper than deferring and paying interest on the deferred amount.
How deferrals affect your credit score
A deferral that you arrange in advance with your lender does not show up as a late payment on your credit report. Your credit score should not drop because of an approved deferral. However, if you miss a payment and then ask for a deferral after the fact, the missed payment may already be reported to credit bureaus and will damage your score.
The key is timing: call your lender before your payment is due. Once a payment is reported as late, a deferral cannot undo that damage. If you are close to missing a payment, contact your lender when ready rather than waiting to see if you can scrape together the money.
Alternatives to deferral if your lender says no
If your lender will not grant a deferral, ask about a loan modification. This is a permanent change to your loan terms — your lender might lower your interest rate, extend your loan term to reduce your monthly payment, or both. A modification is more involved than a deferral and takes longer to process, but it can lower your payment for the rest of the loan.
A forbearance agreement is another option. With forbearance, your lender temporarily reduces or pauses your payments for a set period, usually three to six months. After the forbearance period ends, you resume regular payments, and the paused amount is either added to the end of your loan or split across your remaining payments. Forbearance is more flexible than a deferral but also more formal.
If you are underwater on your loan — you owe more than the car is worth — or if the car is no longer affordable, selling the car and paying off the loan may be your best option, even if it means taking a loss. Continuing to pay for a car you cannot afford will only deepen your financial strain.
What to do if you cannot defer and cannot pay
If your lender denies a deferral and you cannot make the payment, contact them anyway before the payment is due. Explain your situation and ask what happens next. Some lenders will work with you even if they initially say no to a deferral. Others will report the missed payment to credit bureaus, which will lower your credit score, but they may still be willing to negotiate rather than repossess the car.
Repossession is expensive for both you and your lender, so lenders often prefer to work out a payment plan or modification rather than seize the car. The longer you wait to contact them, the fewer options you have. If you ignore the problem, your lender will eventually send the car to a repossession company, and you will lose the car and still owe the remaining loan balance plus repossession fees.
Frequently Asked Questions
Can I defer a payment if I am already late?
It depends on your lender and how late you are. If you are a few days late, some lenders will still work with you. If you are 30 days or more late, a deferral is less likely because the late payment has already been reported. Contact your lender when ready to ask — waiting makes it worse.
Will deferring a payment hurt my credit score?
No, if you arrange the deferral before the payment is due. An approved deferral does not show up as a late payment. However, if you miss the payment first and ask for a deferral after, the missed payment may already be on your credit report and will lower your score.
How many times can I defer a payment?
Most lenders allow one or two deferrals per year, but this varies. Check your loan agreement or call your lender to find out your specific limit. Some lenders cap the total number of deferrals over the life of the loan.
What is the difference between a deferral and forbearance?
A deferral postpones one payment to a later month. Forbearance pauses or reduces payments for a longer period, usually three to six months. Forbearance is more formal and requires a written agreement, but it gives you more breathing room if your hardship will last longer than a month.
Will I owe interest on the deferred payment?
Usually yes. Interest typically continues to accrue during the deferral period, so the deferred payment will be larger when it comes due. Ask your lender whether interest will accrue before you agree to the deferral.