How to Defer a Car Loan
Whenever you are faced with financial challenges, a restructuring or adjustment may be needed for your budget. One way to do this is with an auto loan deferment. To receive a deferment you have to complete several steps. A deferment allows you to skip a monthly payment and make it up at some time in the future. Deferments can temporarily remove pressure from your budget and make your finances more manageable. Sometimes you can use the money you save to pay another debt.
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Instructions
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Call the collections department for your auto lender and let them know you need a deferment. Find out what the qualifications are. Some banks or lenders will require that you have an emergency situation before you can be considered for a deferment. If you ask for a holiday deferment, your request could be denied. You may need to have made a certain amount of payments, perhaps 10, before you will be considered for a deferment. Explain your situation in its entirety to see if you qualify or can be considered. This qualification could vary from lender to lender. Lenders have policies and time frames for extending deferments. You may be allowed to have one deferment in a 12-month period and two deferments within a 5-year period. Each lender may have their own time frame for extending deferments.
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Wait for the deferment form. Some lenders will need to send you a deferment form which you will fill out with personal information. They will mail or fax the deferment form to you. The form should be signed and dated. Your signature gives the lender permission to process the deferment request. There could be a processing fee which can vary from state to state.
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Provide the auto lender with all of your personal information. Either fax or mail the form back to the lender. You will need your name, loan number and address. Some lenders will obtain a credit report to get a true picture of your financial situation. When all of the information has been gathered, the lender will make a decision, which could take five to seven days.
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Follow up with the lender to see if your account has been approved for a deferment. When you have been approved, your loan will be extended for one additional month. You will be able to pay the extra payment at the end of your loan term. The lender may send written confirmation that your deferment has been approved. If you fall behind after a deferment has been completed, you are in default, and the lender can repossess your car. Deferments do not appear on your credit report.
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