Deferring a personal loan payment can relieve financial stress for a month or two, but the total cost could go up.
Annie Millerbernd
Assistant Assigning Editor | Personal loans, high-interest loans, cash advance apps
Annie Millerbernd is an assistant assigning editor and NerdWallet authority on personal loans. She has been a journalist for nearly a decade. Before joining NerdWallet in 2019, she worked as a news reporter in Minnesota, North Dakota, California, and Texas, and as a digital content specialist at USAA. Annie's work has been cited by the Northwestern University Law Review and Harvard Kennedy School . Her work has been featured in The Associated Press, USA Today and MarketWatch. She’s also been quoted in New York magazine and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio. She is based in Austin, Texas.
Lead Assigning Editor Kim Lowe
Lead Assigning Editor | Consumer lending
Kim Lowe is a lead assigning editor on NerdWallet's loans team. She covers consumer borrowing, including topics like personal loans, student loans, buy now, pay later and cash advance apps. She joined NerdWallet in 2016 after 15 years at MSN.com, where she held various content roles including editor-in-chief of the health and food sections. Kim started her career as a writer for print and web publications that covered the mortgage, supermarket and restaurant industries. Kim earned a bachelor's degree in journalism from the University of Iowa and a Master of Business Administration from the University of Washington. She works from her home near Portland, Oregon.
Fact Checked Co-written by Ronita Choudhuri-Wade Lead Writer Ronita Choudhuri-Wade
Lead Writer | Personal finance, Personal loans
Ronita Choudhuri-Wade is a former NerdWallet writer covering personal loans. Before joining NerdWallet, Ronita was a freelance writer for the fintech company Wise (formerly TransferWise) on global money transfers and banking internationally. She was previously a senior internal wholesaler at MainStay Investments, holding her Series 6, 65, 63 and 7 licenses. Ronita graduated from New York University and has a master’s degree in globalization and development from the University of Manchester in the United Kingdom. Ronita currently lives in Tulsa, Oklahoma.
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Many lenders offer short-term deferment plans for those who can’t make their personal loan payments due to financial hardship. These plans let you extend your loan term in exchange for a break from your regular monthly payment.
Temporarily pausing your payments isn’t free if your lender charges interest on deferred payments. But if you need short-term relief, deferment may be an option.
Loan deferment, or forbearance, is when a lender allows you to delay repayments on a personal loan without violating the loan agreement. Typically, when you defer a loan, you extend the loan term by an agreed-upon deferral period. Some lenders allow deferred payments for a finite period, like up to 90 days, before resuming regular payments.
Most personal loan lenders continue to charge interest during the deferred period. For example, if you defer three months of payments on a 36-month loan, and the loan keeps accruing interest, you’ll end up paying 39 months of interest.
If you can’t make payments on a personal loan, here are the steps to defer.
Contact your lender. Nearly all lenders require you to reach out to discuss deferment options.Provide supporting evidence. Lenders may ask for documents or proof of hardship, such as unemployment compensation.
Prepare for a deferment decision. Lenders may not approve hardship applications instantly, so be prepared to maintain your loan in good standing while the lender considers your situation.
If you start making late payments or skipping them entirely without notifying your lender of a problem, your credit may be impacted, and your loan could be considered in default .
Make sure you know whether your personal loan will continue to gather interest so you can calculate how much deferring will cost.
Your credit score shouldn’t change if you defer personal loan payments — lenders aren’t supposed to report them as missed or late to credit bureaus.
Still, you should check your credit reports to be sure payments are being recorded correctly. You can check your free TransUnion credit report with NerdWallet, or visit AnnualCreditReport.com to see your reports with the three major credit bureaus (the other two are Equifax and Experian).
Your credit score will be impacted, however, if the lender hasn’t approved your application for deferment and you stop making payments. If you have applied for deferment, but your monthly payment comes due before the lender approves your application, try to make the payment to avoid a hit to your credit score.
Here are ways to get relief if you’re struggling to make personal loan payments.
Consolidate or refinance your loan. If you have good or excellent credit, refinancing or consolidating your debts with a lower-interest loan can be a way to cut costs.
If you have multiple sources of unsecured debt like credit cards, a debt consolidation loan can roll all your debts into one, making payments easier to manage. This option is usually best if the debt consolidation loan’s annual percentage rate is lower than the combined rate on your credit cards.
Find ways to make more cash . Consider earning money with freelance work or a temporary side gig to help make payments instead of deferring them or borrowing more money.
Reach out to other financial institutions. Contact your insurer, credit card company, mortgage lender or bank and see if they offer hardship plans that can help.
Look for local alternatives to a personal loan. If you’re trying to avoid adding debt, reach out to friends, family or your local community for assistance.
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Annie Millerbernd is a personal loans editor. Her work has appeared in The Associated Press and USA Today. See full bio.
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Ronita Choudhuri-Wade is a former NerdWallet writer specializing in personal loans. Previously, Ronita's work has been featured in the Washington Post, LA Times, Nasdaq and MarketWatch, among other publications. Ronita has also appeared on "Mornings With Maria Bartiromo". See full bio.
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