What is a payment deferral?
With a payment deferral, you and your lender make an agreement that lets you stop making payments for a set period of time.
While deferred payments are usually set up due to financial hardship, you can request payment deferral for any reason. Be aware that some payment deferral options are offered on an institutional basis, while your lender may agree upon others only on a case-by-case basis.
Some credit cards also offer a deferred payment plan that lets consumers skip interest payments and finance purchases over a set period of time with a specific fee structure instead. The American Express Plan It feature is a good example of this.
How deferred payments affect your credit
While some deferred payment options are for purchases you need to make, this guide is mostly intended to help you understand your options when you’re struggling to make payments on a loan you already have.
This leads us to an important question: Will skipping loan payments due to a hardship hurt your credit score? The short answer is no, if it’s done properly, but only if it’s done properly.
Payment history is the most important factor used to determine credit scores with both the FICO and VantageScore scoring models, so you'll need to speak with your lender about payment deferral before you stop making payments on your loan.
After you’ve reached a formal agreement with your lender to pause payments for a limited time and you have that agreement in writing, only then should you begin skipping the agreed-upon number of loan payments.
While a payment deferral agreement may be reported to the credit bureaus, skipped payments that are mutually agreed upon by the financial institution and the borrower do not negatively affect credit scores. You can further avoid any negative impact on your credit scores by resuming on-time payments as soon as the deferral period ends.
» DIVE IN: How long do late payments stay on a credit report?
Types of deferred payment
Deferrals can be categorized depending on whether they reflect a hardship situation or if they’re promotional.
Mandatory deferrals
Under extreme circumstances, government policy may allow borrowers to temporarily defer payments on eligible student loans or mortgages, due to a large number of borrowers facing economic hardship or uncertainty. This happened during the COVID-19 pandemic.
Voluntary/hardship deferrals
Your lender or credit card company may allow you to defer your payments for a period of time if you lose your job or are experiencing financial hardship for another reason.
If you’re facing economic hardship that makes it difficult to pay your bills, contact your lender or credit card company as soon as possible to learn about its deferral options. Simply skipping payments would have a negative impact on your credit score.
BNPL and promotional deferrals
Carlos Medina, chief operating officer for One Technologies, which owns the credit monitoring product ScoreSense, pointed out that "buy now, pay later" (BNPL) offers are another type of deferred payment option to look for. With a BNPL promotion, a consumer can break up a purchase into gradual installment payments.
"Buy now, pay later is a short-term financing option that defers payments for purchases, giving consumers the opportunity to break payments into smaller, more manageable dollar amounts," said Medina.
It's not uncommon for major retailers to have BNPL promotions, and Medina pointed out that both Walmart and Amazon have this option for eligible purchases.
How to defer a payment
Deferring payments may or may not be an option for you, depending on the type of loan you have and the financial institution you’re working with.
Deferred payment options may not be clearly listed on your financial institution’s website, so it’s sometimes best to call and see what options it has to help you. “A financial institution might be willing to defer a payment if it seems like a short-term need versus not being able to make any payments going forward,” Medina said.
Mortgage payments
Depending on your mortgage lender, you may be able to find resources online that outline options if you’re struggling to keep up with payments. Many major banks, including Chase, U.S. Bank and Wells Fargo, list mortgage assistance options on their websites.
If your mortgage lender lists deferred payments or mortgage forbearance as an option, you should follow the steps outlined on its website. For example, Chase and U.S. Bank let you apply for mortgage assistance online, whereas Wells Fargo asks you to call and speak with a home preservation specialist.
» MORE: Government home loans: What are they and should you get one?
Car payments
The Consumer Financial Protection Bureau (CFPB) says that there are several ways to work with your auto lender if you're struggling to make payments. For example, you can ask your lender to change your payment due date, or you can request an updated repayment plan.
You can also request a payment deferral or payment extension, in which case your auto lender may want to work with you and give you time to get back on track. If you have a good credit score, you may even be able to refinance your auto loan to get a new loan with better rates and terms.
As with mortgage payments, many auto lenders offer information online about payment deferral and forbearance options. Lenders may also have a hotline you can call to speak with a loan specialist about payment deferrals and forbearance, so make sure to check.
Credit card payments
You may get your credit card issuer to waive your monthly payments for a set period of time, but you'll have to ask to find out.
Equifax says that, when it comes to credit card payment deferral, some card issuers might agree to reduce your interest rate or lower your monthly payment for a limited time, while others might let you defer payments (though interest would continue to accrue). Since each credit card issuer has its own process and policy for customers who are struggling to make payments, your personal results will vary.
Private student loans
Many private student loan companies, such as SoFi, have forbearance and payment deferral plans that can give you some time to catch up if you lose your job.
If you're not sure whether your private student loan company has a payment deferral option, call your lender to inquire and find out what assistance is available to you (if any).
» MORE: Government assistance programs: What are your options?
Deferral alternatives
Payment deferral is a short-term solution to your problems since it only postpones debt repayment instead of eliminating it. With that in mind, you may want to consider other options if your bills are too high or you're experiencing financial hardship.
Consider the following alternatives instead of, or in addition to, payment deferral:
- Dip into your savings. If you have some money stashed away and you can use it to pay off debts, this can be a viable option.
- Consolidate your debts. Consider consolidating high-interest debts with a balance transfer credit card or a personal loan. Either option could help you save on interest and/or get a lower monthly payment.
- Refinance your debts. Look into refinancing your home loan, auto loan or other debts to get more affordable and more manageable terms.
- Use your assets. Medina said you can also consider using assets you have to pay off debt. For example, you could tap into your home equity with a home equity loan and use the funds to pay off credit card debt.
» MORE: What is a debt management plan?
FAQ
Are you charged interest during a payment deferral?
Whether you're charged interest during payment deferral depends on the loan type and payment deferral details. However, most deferred payment agreements still add interest to your account based on the original terms during the paused payment period.
The exception is with federal student loans, which don’t add interest to your loan balance when you're in deferment but do charge interest if your student loan is in forbearance instead.
Is deferral the same as forbearance?
No; while both allow you to pause or reduce loan payments, there are some differences. For example, some loans (including federal student loans) don't accrue interest during payment deferral but do accrue interest in forbearance.
How many times can you defer a payment?
The number of times you can defer a payment depends on the type of loan and the assistance programs your lender offers.
What is a hardship deferment?
A hardship deferment is a type of pause on loan payments you can request when you’re struggling financially. During a hardship deferment, you’re not required to make payments on your loan, and interest will not accrue on some types of federal loans. However, interest may still accrue on other types of loans, such as unsubsidized loans, during a deferment period.
Bottom line
Asking your lender if you can skip a few payments on your loan doesn't have to wreck your finances or destroy your credit. If your request is granted, you may even wind up financially stronger in the end since you'll have a few months (or longer) to catch up on bills and get your finances back on track.
Just remember that your lender has to agree to payment deferral for you to avoid negative impacts on your credit score due to skipped payments.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Federal Reserve Bank of New York, "Household Debt and Credit Report." Accessed Feb. 3, 2026.
- American Express, "What is American Express Plan It?" Accessed Feb. 3, 2026.
- VantageScore Solutions, LLC, "The Complete Guide to Your VantageScore 4.0 Credit Score." Accessed Feb. 3, 2026.
- Fair Isaac Corporation, "How are FICO Scores Calculated?" Accessed Feb. 3, 2026.
- JPMorgan Chase Bank, N.A., "Mortgage Assistance Application - Find Assistance Options | Chase." Accessed Feb. 3, 2026.
- Wells Fargo Bank, N.A., "Mortgage Payment Help." Accessed Feb. 3, 2026.
- U.S. Bank National Association, "Mortgage assistance | Mortgage relief and qualification process." Accessed Feb. 3, 2026.
- Consumer Financial Protection Bureau, "How to work with your mortgage servicer." Accessed Feb. 3, 2026.
- Consumer Financial Protection Bureau, "Worried about making your auto loan payments? Your lender may have options that can help." Accessed Feb. 3, 2026.
- Equifax Inc., "Forbearance and Your Credit Reports." Accessed Feb. 3, 2026.
- Federal Student Aid, "What is the difference between loan deferment and loan forbearance?" Accessed Feb. 3, 2026.
