Can You Push a Car Payment Back? What You Need to Know

Unexpected financial challenges can make meeting car payments difficult. While not always guaranteed, solutions often exist for borrowers experiencing financial hardship who need to temporarily postpone or adjust these payments.

Exploring Payment Deferral Options

Lenders may offer several arrangements to assist borrowers facing difficulty with their car payments. A “payment deferral” allows a borrower to skip one or more scheduled payments, with those payments usually added to the end of the loan term. A “loan extension” stretches out the remaining loan term, often resulting in lower monthly payments but increasing the total interest paid over the life of the loan.

“Forbearance” allows a temporary suspension or reduction of payments for a defined period. A “loan modification” involves a more significant change to the original loan terms, potentially altering the interest rate, principal balance, or loan duration. The availability of these options depends heavily on the specific lender’s policies and the terms of the original loan agreement. These solutions are generally considered during periods of financial distress, such as job loss, medical emergencies, or other unforeseen events.

Steps to Request a Payment Deferral

Initiating a request for a payment deferral or similar arrangement begins with promptly contacting the lender. Borrowers should reach out to their loan servicer directly, either through a dedicated customer service line or via their online account portal. Early communication is beneficial, as lenders are often more willing to work with borrowers who proactively address potential payment issues before a payment is missed.

Before contacting the lender, gather essential information, including the loan account number, personal identification details, and a clear explanation of the financial hardship. Having a specific proposal, such as requesting to defer one payment or extend the loan by a few months, can streamline the discussion. The lender will likely require the borrower to complete specific forms or provide documentation supporting the stated hardship. This might include proof of income changes or medical bills.

Once an agreement is reached, obtain all terms of the deferral in writing. This documentation should clearly outline the number of payments deferred, any changes to the loan term or payment schedule, and any associated fees. Maintaining a record of all communications, including dates, times, and the names of representatives spoken with, provides a valuable reference. This helps ensure both parties understand the agreed-upon arrangement and can prevent future misunderstandings.

Understanding the Financial Implications

While payment deferral options can provide temporary relief, they often carry financial implications that borrowers must understand. Interest continues to accrue on the outstanding loan balance during a deferral period, even if payments are paused. This means that the total cost of the loan will likely increase, as the borrower will pay more interest over the extended loan term. The deferred payments are usually added to the end of the loan, extending the time it takes to repay the debt.

The impact on a borrower’s credit score can vary based on how the deferral is reported by the lender. If a deferral is formally approved and reported as “account current” or “payments deferred as agreed,” it typically does not negatively affect the credit score. However, an unauthorized missed payment, without a prior agreement, will be reported as a late payment and can damage credit. Confirm the lender’s credit reporting policy regarding the deferral agreement.

Some lenders may also charge administrative fees for processing a payment deferral or loan modification. These fees, which can range from a nominal amount to a percentage of the deferred payment, should be clearly disclosed before the agreement is finalized. Borrowers should review all terms of the deferral agreement, including the revised total loan cost, any new payment schedule, and any associated fees, to ensure they understand the long-term financial consequences before accepting the arrangement.