 TITLE: What Happens If You Defer a Car Payment? CONTENT: Alternatives to Car Payment Deferment\n-------------------------------------\n**Refinancing.** If your income is steady and you're simply finding your car payment too large to manage every month, one alternative to consider is refinancing your car loan—essentially taking out a new loan with smaller monthly payments. You'll likely only be able to do so if the car has retained most of its value, and your credit has remained as strong as it was when you took out your loan (or become stronger). Refinancing your loan to get smaller monthly payments will almost always mean extending the repayment period on the loan, adding to the overall number of payments and to the total cost of the loan. That could mean significant extra cost to you, but as an alternative to missing payments or defaulting on the loan, it could be well worth it.\n**Getting someone else to assume the loan.** This is a long shot, because most auto loan agreements expressly forbid it, but a select few lenders may work with you to help arrange the transfer of your loan to another person. In fact, this involves the lender issuing a new loan to the transferee, so the person assuming payments must be willing and able to take over payments at least as large as those you're making and have credit as good or better than yours to qualify for loan terms comparable to yours. If you want to go this route and you have a potential transferee in mind, make sure you know their credit score (and that it's comparable to yours), and then contact the lender before any funds trade hands to make sure you can proceed.\n**Voluntary surrender.** No one wants it to come to this, but if all else fails, or if the car is worth less than what you owe on it, you may have to consider turning it over to the lender in a process known as voluntary surrender. This is essentially forfeiting the car before the lender repossesses it. Because a voluntary surrender is a failure to repay your car loan, it appears as a negative entry on your credit report and likely will lower your credit score. It is considered less derogatory to your credit than a repossession, but it's still something you should try to avoid if at all possible.\nCar loan deferment is never an ideal scenario, but under circumstances where you just need a month or two of relief to get your payments back on track, it can provide some welcome room to maneuver. END