A loan deferment is a policy that many car lenders offer to their borrowers if they're in danger of missing a payment and need help. These policies allow borrowers to get back on track while preventing loan defaults and vehicle repossessions. There are many different types of loan deferments that might be available to you, but they come with some important pros and cons.

When a Loan Deferment Makes Sense

What Is a Loan Deferment?A loan deferment makes the most sense when you’re struggling financially, possibly due to unforeseen circumstances such as a job loss or medical emergency. Many lenders understand that you may need a temporary adjustment to get back on your feet.

Lenders are typically more willing to offer a loan deferment if you come to them before you miss a payment. Just like you, they don't want to deal with the repossession process.

Lenders typically offer a 30-day deferment, but some may also offer forbearance, which is a temporary pause. This allows you to skip a payment or two, which are then added to the end of the loan term.

Pros and Cons of Auto Loan Deferment

Auto loan deferments are great for a temporary fix, but not ideal if you’re looking for a long-term solution. If you’re on the fence about a loan deferment and aren’t sure if it's right for you, take a look at the pros and cons.


  • You avoid the chance of facing repossession
  • You avoid paying late fees
  • You get enough time to refinance the car
  • You get enough time to sell the vehicle


  • The missed payment(s) doesn't go away – you have to make it up eventually
  • You may need to make an interest payment despite skipping a monthly payment
  • Interest still accumulates during the deferment period, which means you end up paying more in interest charges
  • You’re limited to how many times you can defer payments

The Bottom Line

The best thing you can do to avoid a car repossession is to reach out to your lender before ever missing a payment. They may offer a loan deferment or another fix. Even if they can't, you’ll be on better terms with them since you tried to prevent the situation ahead of time.

While we can’t help with loan deferments, we can assist you if you need a bad credit auto loan. Auto Credit Express connects car buyers to local dealerships that specialize in working with unique credit situations.

Our service is free and doesn't put you under any obligation. Get started with confidence by submitting our secure auto loan request form today!