 TITLE: What Happens If You Defer a Car Payment? CONTENT: How Does Deferring a Car Payment Work?\n--------------------------------------\nUnder a car loan deferment, the lender agrees to let you pay a lower payment or no payment at all for a month—or two, or three, but probably not much longer than that—with the expectation that you'll be able to resume your regular payment schedule after the deferment ends.\nNot all auto lenders allow deferments, and those that do have different procedures for requesting them. Sometimes a deferment option is built into your loan agreement (in which case you might see a \"skip a payment\" option on the webpage where you make your payments or a \"skip payment\" slip in your payment coupon book). Other lenders require you to submit a written request, known as a hardship letter, in which you explain why you need the deferment and when you'll resume your regular payments.\nAlong with the hardship letter, your lender may ask for additional financial details (not unlike the information they probably required when you took out the loan), and they may also review your credit score and credit report. If your credit score has declined significantly since you got your car loan, or if your income or assets have dropped, the lender might decline to give you a deferment. If the lender agrees to the deferment, it will issue a forbearance agreement for you to sign—essentially a contract indicating when you will resume your regular payments, specifying any fees or penalties you'll be charged as part of the arrangement.\nA deferment may allow you to skip your payment altogether, or it may call for a reduced payment consisting only of the interest portion of your next scheduled payment. Either way, any skipped or reduced payments will be added on to the end of your repayment period, and interest will continue to accrue on the loan for those extra months, so that you'll have to pay significantly more than the amount of each deferred payment before your loan is repaid. In addition, you'll likely be charged a fee for each skipped payment, so a deferment is anything but a free pass. END