Step-by-step guide to requesting a car payment deferral, what documentation you need, and what to avoid when dealing with your lender

When unexpected financial hardship hits—job loss, medical emergency, or any crisis that disrupts your income—your car payment can suddenly feel impossible to manage. The good news is that most auto lenders offer payment deferral programs that allow you to skip one or more payments without losing your vehicle.

This guide walks you through exactly how to defer your car payments, step-by-step, including what documents you'll need, what to say to your lender, and critical mistakes to avoid.

What Is Car Payment Deferral?

Car payment deferral (also called payment extension or skip-a-payment) is an arrangement where your lender agrees to let you skip one or more monthly payments. The deferred payments are typically moved to the end of your loan term, extending the total length of your loan by the number of months you skip.

Example: You have 30 months left on your loan with $300 monthly payments. You defer 2 months. Now you have 32 months left, and your next payment is due in 2 months instead of this month.

How Deferral Differs From Other Options

Deferral vs. Forbearance: These terms are often used interchangeably. Technically, forbearance is the broader category that includes deferral, but in practice, they usually mean the same thing for auto loans.

Deferral vs. Payment Reduction: Deferral means skipping payments entirely. Payment reduction means making smaller payments for a period of time.

Deferral vs. Refinancing: Deferral keeps your existing loan intact but pauses payments. Refinancing replaces your loan with a new one, potentially with different terms.

Deferral vs. Missing Payments: Deferral is pre-approved by your lender and won't damage your credit. Simply not paying without an arrangement will result in late fees, credit damage, and potential repossession.

For a complete overview of all relief options, see our guide on car payment relief options.

Who Qualifies for Payment Deferral

While each lender has different requirements, most deferral programs have similar eligibility criteria:

Common Qualification Requirements

Documented Financial Hardship: You must show that you're experiencing genuine financial difficulty, such as:

• Job loss or layoff
• Reduced work hours or income
• Medical emergency or disability
• Death of spouse or household income earner
• Natural disaster impact
• Military deployment
• Other unforeseen financial crisis

Good Payment History: Most lenders prefer borrowers who have:

• Made payments on time for at least 6-12 months
• Are currently current on the loan (or less than 30 days late)
• Haven't previously used deferral recently (usually within the past 12 months)

Account in Good Standing: Your account should not:

• Already be in default
• Have excessive late payments in the past year
• Be subject to repossession proceedings

Reasonable Expectations: You should be able to demonstrate that:

• Your hardship is temporary
• You'll be able to resume regular payments after the deferral period
• You have a plan to stabilize your finances

Who May Not Qualify

You may have difficulty getting approved if:

• You're already 90+ days past due
• You've used deferral multiple times in the past year
• You can't provide documentation of hardship
• Your lender doesn't offer deferral programs (rare, but some smaller lenders don't)
• You've had the loan less than 6 months

Even if you don't meet all criteria, it's still worth asking—lenders may make exceptions, especially during widespread economic hardships or natural disasters.

Documentation You'll Need

Before contacting your lender, gather these documents to support your request:

Proof of Hardship

Depending on your situation, collect:

For Job Loss:

• Termination or layoff letter from your employer
• Final pay stub
• Unemployment benefits approval letter
• Recent bank statements showing reduced deposits

For Reduced Income:

• Recent pay stubs showing decreased hours or wages
• Letter from employer explaining reduction
• Comparison of previous vs. current income

For Medical Emergency:

• Medical bills or hospital statements
• Doctor's note or disability documentation
• Insurance claim paperwork (if applicable)

For Death in Family:

• Death certificate
• Documentation showing the deceased's income contribution

For Natural Disaster:

• Insurance claim documentation
• FEMA assistance paperwork (if applicable)
• Photos or documentation of damage

For Military Deployment:

• Deployment orders
• Military documentation

Financial Information

Your lender may also request:

• Last 2-3 months of bank statements
• Current pay stubs (if still employed)
• List of monthly expenses and income
• Budget worksheet

Loan Information

Have ready:

• Your loan account number
• Current balance and payment amount
• Payment due date
• VIN (vehicle identification number)

Organizing these documents before you call shows you're serious and organized, which helps your case.

Step-by-Step: How to Request Payment Deferral

Follow these steps to maximize your chances of approval:

Step 1: Review Your Loan Agreement

Before requesting deferral, check your loan contract for:

• Any mention of hardship or deferral programs
• Fees for modifications or payment changes
• Restrictions on payment changes
• Contact information for loss mitigation

This helps you understand your lender's policies before calling.

Step 2: Contact Your Lender Immediately

Don't wait until your payment is due or you've already missed it. Call as soon as you know you'll have trouble with your next payment.

Where to Call:

• Look for "loss mitigation," "hardship assistance," or "customer retention" department
• If calling the main customer service line, ask to be transferred to the department that handles payment deferrals
• Your monthly statement or online account should have contact information

Best Times to Call:

• Early morning (8-10 AM) on weekdays—shorter wait times
• Mid-month rather than beginning or end of month
• Avoid the 5th-10th of the month when most payments are due (highest call volume)

Step 3: Prepare Your Talking Points

Before calling, write down:

• Your account number
• Clear explanation of your hardship (be specific and honest)
• When the hardship started
• How long you expect to need relief (1-3 months is most common)
• What you're requesting (e.g., "defer 2 monthly payments")
• When you expect to resume payments

Sample Script:

"Hi, my name is [Your Name] and my loan account number is [Number]. I'm calling to request a payment deferral due to financial hardship. I was laid off from my job on [date] and am currently receiving unemployment benefits while searching for new employment. I've been a customer in good standing for [X] years and have never missed a payment. I need to defer my next two monthly payments while I secure new employment. I expect to be working again within 60 days and will be able to resume regular payments at that time. Can you tell me what deferral options are available?"

Use our Hardship Letter Generator to help craft your request and create a written version to email after your call.

Step 4: Make the Call

During your call:

Be Polite and Professional: Remember, the person on the phone wants to help you. Being friendly goes a long way.

Be Honest: Explain your situation truthfully. Exaggerating or lying can backfire if they ask for documentation.

Ask Specific Questions:

• How many payments can I defer?
• Will interest continue to accrue during deferral?
• How will this be reported to credit bureaus?
• What happens to the deferred payments?
• Are there any fees?
• What documentation do you need from me?
• Can I get this agreement in writing?

Take Detailed Notes:

• Representative's name and ID number
• Date and time of call
• Reference or case number for your request
• Exactly what was discussed and agreed upon
• Next steps and timeline
• Callback number if needed

Don't Accept Vague Promises: Get specifics. "We'll work with you" isn't enough. You need clear terms.

Step 5: Submit Required Documentation

Your lender will likely ask you to:

• Email documents to a specific address
• Upload them through your online account portal
• Fax them (less common but still used)
• Mail them (slowest option—avoid if possible)

Submit everything as soon as possible. Incomplete applications are delayed or denied.

Pro Tip: When emailing documents, include:

• Your loan account number in the subject line
• Reference number from your phone call
• A brief cover letter restating your request
• All documents in PDF format with clear filenames

Step 6: Follow Up and Get Written Confirmation

Timeline: Most lenders process deferral requests within 5-7 business days, though some may be faster or slower.

Follow Up: If you haven't heard back within the promised timeframe, call again. Reference your case number and ask for a status update.

Written Confirmation: Once approved, you should receive written confirmation (email or mail) that includes:

• Start and end dates of your deferral period
• Number of payments being deferred
• Your new loan maturity date (extended by deferral period)
• When payments resume and the amount
• How it will be reported to credit bureaus
• Any fees or charges
• New total amount financed

DO NOT skip your payment until you have this written confirmation. If you stop paying based only on a phone conversation and the deferral isn't actually approved, you'll damage your credit and risk repossession.

Step 7: Calendar Important Dates

Once approved, immediately:

• Mark when your deferral period ends
• Set a reminder for when your next payment is due
• Note the new total length of your loan
• Set a reminder to check your credit report in 30 days to ensure proper reporting

What Happens During Deferral

Once your deferral is approved and active:

Interest Continues to Accrue

In most cases, interest continues accumulating during deferral even though you're not making payments. This means:

• Your loan balance increases slightly
• You'll pay more total interest over the life of the loan
• Your final payoff amount will be higher

Example: Your balance is $10,000 at 6% APR. During a 2-month deferral, approximately $100 in interest accrues and is added to your balance, making it $10,100.

Your Loan Term Extends

If you defer 2 months, your loan becomes 2 months longer. If you had 20 payments left, you now have 22.

Your Credit May Be Affected (Or Not)

How deferral appears on your credit report depends on your lender:

Best Case: Account shows as "current" and in good standing—no negative impact

Middle Case: Account shows as "modified" or "deferred"—minimal negative impact

Worst Case: Missed payments show as late—moderate negative impact (though less than if you simply didn't pay)

This is why asking "How will this be reported?" before agreeing is crucial.

You Don't Make Payments

This seems obvious, but it's worth stating: during the deferral period, you don't owe your regular monthly payment. Don't accidentally pay out of habit!

However, if your situation improves early, you can usually resume payments before the deferral ends—just contact your lender.

Common Mistakes to Avoid

Mistake #1: Waiting Too Long

The biggest mistake is waiting until you've already missed multiple payments. Contact your lender:

• The moment you know you'll have trouble
• Before your payment is due
• Before you're 30+ days late

Early action gives you more options and better terms.

Mistake #2: Stopping Payments Without Approval

Never stop paying based on a phone conversation alone. Continue making payments until you have written confirmation of your deferral approval. Otherwise, you'll accrue late fees and damage your credit.

Mistake #3: Not Getting It in Writing

Verbal agreements mean nothing if there's a dispute later. Always get written confirmation via email or letter.

Mistake #4: Failing to Resume Payments

Set multiple reminders for when deferral ends. Missing your first post-deferral payment looks bad and can negate the goodwill you built.

Mistake #5: Not Asking About Credit Reporting

Don't assume deferral won't affect your credit. Explicitly ask how it will be reported and get that answer in your written agreement.

Mistake #6: Using Deferral Repeatedly

Deferral is for emergencies, not routine cash flow management. Using it repeatedly signals to lenders that you can't afford the car, and they may deny future requests or take other action.

Mistake #7: Being Dishonest

Lying about your hardship or submitting fake documents can result in:

• Immediate denial
• Acceleration of your loan (full balance due immediately)
• Fraud charges (in extreme cases)
• Permanent damage to your relationship with the lender

Alternatives If Deferral Isn't Approved

If your lender denies your deferral request, don't give up. Try these alternatives:

Ask Why It Was Denied: Understanding the reason helps you address it or find an alternative.

Request a Supervisor: Sometimes a manager has more authority to approve requests.

Ask About Other Options:

• Loan extension (permanently lowering your payment)
• Payment reduction plan (temporarily paying less)
• Refinancing with the same lender
• Catching up gradually via payment plan

Refinance With a Different Lender: If your credit is decent, another lender might offer better terms.

Negotiate a Payment Plan: If you're already behind, see if they'll let you catch up over time rather than all at once.

Consult a Nonprofit Credit Counselor: NFCC-certified counselors can sometimes negotiate on your behalf for free.

For more options, see our comprehensive guide on help with car payments.

After Deferral: Getting Back on Track

Once your deferral period ends, follow these steps to stay on track:

Resume Payments On Time: Your first post-deferral payment is critical. Pay it on time or even early to demonstrate you're back on your feet.

Set Up Automatic Payments: This ensures you never miss a payment due to forgetfulness or busy schedules.

Build an Emergency Fund: Even $500-$1,000 can prevent needing deferral again for minor emergencies.

Improve Your Budget: Review your spending and find areas to cut so you can better handle your payment going forward.

Monitor Your Credit: Check your credit report 30 days after deferral to ensure it's being reported correctly. Dispute any errors immediately.

Communicate With Your Lender: If you foresee any future difficulties, contact them early. They're more likely to help repeat customers who communicate openly.

If you're concerned about long-term affordability, consider whether you should explore refinancing options or even selling the vehicle.

Special Deferral Programs

Some situations qualify for special deferral programs with better terms:

Military Deferral

Active duty military members have special protections under the Servicemembers Civil Relief Act (SCRA), including:

• Interest rate caps (6% maximum)
• Protection from repossession during active duty
• Extended deferral periods for deployment

Contact your lender's military support team and provide your deployment orders.

Disaster Relief Deferral

After hurricanes, wildfires, floods, or other major disasters, lenders often offer:

• Extended deferral periods (3-6 months)
• Waived documentation requirements
• Fee waivers
• Simplified approval process

Check your lender's website or call to ask if disaster relief is available in your area.

Pandemic and Economic Crisis Programs

During major economic crises (like COVID-19), lenders may offer enhanced programs with:

• Longer deferral periods
• More lenient approval standards
• Better credit reporting policies

These are usually time-limited, so act quickly when available.

Take Action Now

If you're facing financial hardship and worried about making your car payment, payment deferral can provide the breathing room you need to get back on your feet. The key is to act early, be prepared, and communicate honestly with your lender.

Your Action Plan:

1. Today: Gather your documentation and review your loan agreement
2. Tomorrow: Call your lender and request deferral using the script above
3. This Week: Submit all required documents and follow up
4. Next Week: Get written confirmation and calendar important dates
5. After Deferral: Resume payments on time and build an emergency fund

Remember: Most lenders want to help you succeed. Deferral programs exist because keeping you in your car and paying your loan (even if delayed) is better for them than repossession.

Don't let pride or fear stop you from asking for help. Thousands of people successfully defer car payments every month and go on to complete their loans. You can too.

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Free Tools to Help You Keep Your Car

• Repo Countdown Tool – See exactly how much time you have before repossession risk increases
• Hardship Letter Generator – Create a professional hardship letter to support your deferral request
• Debt Relief Quiz – Get personalized recommendations for your financial situation

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