What is a deferred payment on a car loan?

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asked Feb 12, 2020 in Buying & Selling by Aniern1957 (300 points)
What is a deferred payment on a car loan?

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answered Feb 12, 2020 by Niko (18,430 points)
When you setup a deferred payment on a car loan the lender for the car loan allows you to miss a payment for a month or even two or 3 months.

This can be good if you're suddenly in a financial situation where you cannot make the monthly payments for a few months.

You'll then still need to pay the payments eventually which could be a year later as in make a balloon payment at the end of the year to catch up on the missed payments.

If you can afford to keep the payments up then it's best to just continue to make the payments because you'll usually be charged higher interest if the lender allows you to make a deferred payment on the car loan.

I had to have a deferred payment before on a car when I suddenly lost my Job and had to go a few months without paying the car loan until I got a new job.

I ended up paying a bit higher interest and had to make a balloon payment for those missed payments at the end of the year.

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