Eight Steps to Defer a Loan Payment

Maintain your good credit rating during financial difficulty

Reduce your debt burden with a hardship loan defermentCredit: istockphoto.com

Make arrangements to defer a loan/credit card payment

During a slow economy or a recession, there are many new people faced with issues of unemployment and an inability to continue paying debt at the same rate as while gainfully employed. Most banks will be willing to defer loan payments for a mortgage, line of credit as well as credit card balances. Before falling into delinquency with creditors, learn how to get an economic hardhip loan deferment to maintain a good credit rating and credit score and avoid forclosure of your home.


Things You'll Need:


Phone or internet

Loan payment in jeopardy

Hardship of unemployment

Step 1

Know your current bills

The first thing to do to get a deferment with a mortgage, credit card, line of credit or other loan is to have a keen awareness of what exactly the current bill is and what if anything you can pay on it, what the total balance due is and due dates. Avoid foreclosure at all costs and start to think about this part before your bank notifies you.

Step 2

Contact creditors

Don't wait to contact your creditors to ask for temporary assistance or worse yet, waiting for your creditors to call you to ask for payment of your debt. The quicker you notify them of your new unemployment status, the more likely your creditors are willing to work with you to resolve the issues. If you'll just be a week late, let them know. If you anticipate being later than a week or two, make arrangements to have the payment deferred. You will save your credit rating and credit score by keeping in contact with all of your lenders. They will appreciate your honesty and willingness to stay current on your payments.

Step 3

Save your credit rating and credit score

Call your mortgage or loan officer and explain your employment situation. You may be connected to the collections department since they handle the billing problems for the company. Be prepared to tell them how you lost your job, what factors played a part in the loss of your job. Explain to the loan officer the things you are doing to acquire new work, how much you could pay and ask to deter your loan payment. Many banks are willing to offer a two to three month deferred payment to assist you in staying current with your debt and to save your credit rating and credit score while you find new employment. Answer all questions to the loan officer honestly.

Step 4

Ask details on how to defer a loan payment

Ask about the terms of agreement of the new payment for two to three months or the maximum amount of time that the loan officer will be able to delay your loan payment. There will usually be a small fee involved and new paperwork may be drawn by the lender to hold you accountable to the loan deferment arrangements.

Step 5

Fill out all necessary paperwork

Fill out the required paperwork from the specific lender and return with the stated fee (usually between $20-$60) promptly.

Step 6

Deferred payment will not exonerate debt

Take note that the deferred payment does not exonerate you from owing the debt and the  payments will be added to the end of the loan. This will create the original final payment to be delayed an additional two to three months depending on the deferment arrangements.

Step 7

Work with financial institution

You will still have to pay the escrow payment for a mortgage as well as interest will still accrue on loans and credit card balances even if you get an economic hardship loan deferment. The loan officer or collections department should tell you what specific amounts will be added to the balance of your loan. Keep this important information with all your loan paperwork.

Step 8

Focus on finding employment

Once you have arranged for your economic hardship loan deferment, you can now relax a little and reduce some stress during a time of hardship without worrying about that bill due shortly and focus instead of finding new employment. At least you will still be able to keep your home, avoiding foreclosure and this option will not adversely affect your credit rating or credit score.


  • Contact your particular lending institution immediately and ask about the possibility of deferring a loan payment.

  • Most creditors should be willing to work with you if they know you are making attempts to pay them on time.

  • There are no guarantees but, it could be worth a try to defer a loan payment.

  • Most auto loans will not be eligible for this option, so always pay your car payments on time or you could face repossession of your vehicle.

  • Never avoid your creditors, be honest and willing to work with them and they will be willing to help you in time of crises.

These steps should definitely help you while you try to obtain a new job - just keep working at it and best of luck.

Help with your temporary hardship situation

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