How Many Times You Can Defer a Car Payment — And What Happens After
Most lenders allow one or two payment deferrals per loan, but the exact number depends on your contract and lender
There is no federal limit on how many times you can defer a car payment. Instead, your lender sets the rules in your loan agreement — usually allowing one to three deferrals over the life of the loan, though some allow none. A deferral means pushing a payment to the end of your loan term rather than skipping it; you still owe the money, and interest keeps accruing. Before you ask for a deferral, check your loan documents or call your lender to learn what your contract actually permits.
The reason lenders limit deferrals is simple: each one extends your loan and increases the total interest you pay. A lender that allows unlimited deferrals would be taking on more risk that you will default before the loan ends. That is why most contracts cap them and why using one counts against your total.
Key Takeaways
- Your loan agreement specifies how many deferrals you are allowed; this number is not the same across all lenders or all loans.
- A deferral postpones a payment to the end of your loan term, meaning you still owe it plus accrued interest — it is not forgiveness.
- Each deferral extends your loan by one month and increases the total interest you will pay over the life of the loan.
- If you have used all your deferrals, you will need to contact your lender about forbearance, modification, or other hardship options.
What your loan documents say about deferrals
Your promissory note or loan agreement contains a section on payment options during hardship. This section lists how many deferrals are available to you and any conditions attached to them — for example, some lenders require you to be current on all payments before you can defer, while others allow deferrals even if you are behind. Read this section carefully or ask your lender's customer service to confirm the number in writing.
If you cannot find your original documents, call the phone number on your monthly statement and ask: "How many payment deferrals does my loan allow, and have I used any yet?" The lender's system will show your deferral history. Write down the answer and the name of the person who told you, in case you need to reference it later.
How a deferral works and what it costs you
When you defer a payment, your lender moves that month's payment to the end of your loan. If your loan has 48 months remaining and you defer one payment, you now have 49 months remaining. The payment you deferred still accrues interest, so you will owe more than the original payment amount when it comes due at the end.
Example: Your monthly payment is $400. You defer one payment. That $400 does not disappear — it moves to month 49 of your loan, and interest continues to accrue on it. By the time month 49 arrives, you might owe $420 or more, depending on your interest rate. You also pay interest on the interest for those extra months, which is why deferrals are expensive over time.
If you defer multiple times, the cost multiplies. Two deferrals add two months to your loan and increase the total interest significantly. This is why lenders limit them and why you should use deferrals only when you have no other option.
What happens when you have used all your deferrals
Once you reach your deferral limit, you cannot defer again. At that point, your options are forbearance, loan modification, or catching up on missed payments. Forbearance is a temporary pause on payments (usually 3 to 6 months) during which interest still accrues; it is not the same as a deferral and is typically offered only in cases of genuine hardship like job loss or medical emergency. Loan modification means changing the terms of your loan — extending the term, lowering the interest rate, or both — which requires the lender's agreement.
If you cannot defer and forbearance is not available, you will need to make your regular payment or contact your lender about a hardship program. Many lenders have programs for customers facing temporary financial difficulty, though these vary widely. Some will work with you to restructure the loan; others will not. The key is to contact your lender before you miss a payment, not after.
The difference between deferral, forbearance, and skipping a payment
These three options sound similar but work very differently. A deferral moves a payment to the end of your loan; you still owe it. Forbearance pauses your payments temporarily (usually 3 to 6 months) while interest continues to accrue; at the end of forbearance, you resume regular payments or make a lump-sum payment to catch up. Skipping a payment without permission is a missed payment, which damages your credit and can trigger late fees and default proceedings.
Never skip a payment without contacting your lender first. Even one missed payment can lower your credit score and make it harder to borrow money in the future. If you cannot make a payment, call your lender immediately — most have hardship departments that can discuss your options before the payment is officially late.
When to use a deferral and when to look for other options
Use a deferral only if you expect your financial situation to improve within a month or two. If you are facing a longer period of hardship — job loss, medical bills, reduced income — a deferral will not solve the problem and will cost you more in interest. In those cases, forbearance, loan modification, or even refinancing might be better choices.
Before you defer, ask yourself: Will I be able to make next month's payment plus the deferred payment? If the answer is no, a deferral is just delaying the problem. Talk to your lender about other options. Some lenders will reduce your payment temporarily, extend your loan term, or work out a catch-up plan if you are behind. These options exist, but you have to ask.
How deferrals affect your credit and your loan
A deferral does not hurt your credit score the way a missed payment does, because you are not missing the payment — you are rescheduling it with your lender's permission. However, some lenders may note the deferral on your credit report as a "deferred payment" or "payment arrangement," which could be visible to other lenders if you apply for credit later.
The bigger impact is on your loan itself. Each deferral extends your loan term by one month and increases the total interest you pay. If you have a 60-month loan at 6% interest and you defer two payments, you are now paying interest for 62 months instead of 60. Over the life of the loan, that extra interest can add hundreds of dollars to what you owe.
Frequently Asked Questions
Can I defer a payment if I am already behind on my car loan?
It depends on your lender's policy. Some lenders require you to be current before you can defer; others will allow a deferral even if you are one or two payments behind. Call your lender and ask. If you are behind, they may offer a catch-up plan or forbearance instead of a deferral.
What happens if I defer a payment and then lose my job?
Contact your lender immediately. Explain your situation and ask about forbearance or loan modification. Many lenders have hardship programs for customers facing job loss. Do not wait until you miss a payment — the sooner you reach out, the more options you will have.
Does deferring a payment hurt my credit score?
A deferral arranged with your lender does not hurt your credit the way a missed payment does. However, it may appear on your credit report as a payment arrangement, which some lenders might view negatively if you apply for new credit soon after.
Can I defer my car payment if I have already deferred twice?
No, not if your loan allows only two deferrals total. Once you reach your limit, you will need to explore forbearance, loan modification, or other hardship options. Contact your lender to discuss what is available to you.
If I defer a payment, do I still owe interest on that month?
Yes. Interest continues to accrue on the deferred payment, so when it comes due at the end of your loan, you will owe more than the original payment amount. This is why deferrals are expensive if you use them multiple times.