what is a payment deferral

What Is a Payment Deferral and How Does It Work for an Online Loan?

Are you considering taking out an online loan but feeling overwhelmed by the idea of making regular payments? You’re not alone; millions of Canadians are carrying debt and struggling to pay it back. However, if you need help, a payment deferral may be the solution you’re looking for. But what is a payment deferral, and how does it work?

A payment deferral is an agreement between you and your loan provider that allows you to temporarily stop making payments or adjust your payment schedule without negatively impacting your credit score or facing penalties.

However, it’s important to understand the implications of a payment deferral before agreeing to it. Keep reading to learn more about payment deferrals for online loans, including how they work, their benefits and drawbacks, and how to decide if it’s the right option for you.

What is a Payment Deferral?

What is a payment deferral for an online loan? As mentioned, a payment deferral allows borrowers to pause their regular loan payments temporarily. During this time, interest on the loan will continue to accrue, meaning that the total amount of interest paid over the life of the loan will be higher.

However, a deferral can be a good option for those experiencing financial difficulties and needing some breathing room. It’s important to note that not all lenders may offer payment deferrals, including those with different requirements or restrictions.

The bottom line? It’s always best to check with your lender and make sure you understand the terms of the deferral before agreeing to it. Consider the long-term implications of going on a payment plan and how it might impact you.

How Does Loan Deferment Work?

The process for asking for deferral varies from lender to lender. Usually, it involves filling out a form explaining your financial situation and providing supporting documents like payslips and bank statements. Once the lender receives your application, they will review your request and determine whether you qualify for loan deferment.

If you obtain approval, your loan payments will be deferred for a specified time, anywhere from a few weeks to a few months. During this time, interest may still accrue on the outstanding balance. So it’s essential to understand the terms and conditions before applying.

Usually, the deferred payments will be added to the end of the loan term, spreading out the amount owed over a longer period. This makes the monthly payments more affordable. We suggest contacting your lender to understand the terms and conditions, eligibility criteria, and consequences of deferring your loan payments.

Can You Defer Online Loan Payments?

Yes, you can defer online loan payments! The process of deferring payments for an online loan works pretty much the same as it does for any other type of loan. You’ll need to contact your lender and request a deferral, and they’ll walk you through the process.

Remember that deferring payments will likely increase the total amount you owe in the long run. So weigh the pros and cons carefully before deciding if it’s the right option for you.

Pros & Cons of a Payment Deferral

Speaking of the pros and cons of payment deferral, what are they? Here are a few to keep in mind.


One of the most significant advantages of payment deferrals is that they can help to avoid late fees. If you can’t pay your loan on time, a payment deferral will give you extra time to make the payment. It can also help you avoid defaulting on your loan, which can negatively impact your credit score.

Similarly, this option helps provide immediate relief to those struggling to make payments. It can give you the time to get back on your feet before resuming your loan payments.

And finally, payment deferrals do not impact your credit score. This means you can take advantage of this option without worrying about damaging your credit score. However, do note that if you fail to make payments, that will impact your score.


One of the biggest downsides of payment deferrals is that it may result in higher interest charges. This is because interest charges will continue to accrue even if you are not making payments. As a result, you may end up paying more in interest over the life of your loan.

Furthermore, your loan term may be extended when you take a payment deferral. This means you will have to make payments for a longer period, which can be a disadvantage if you want to pay off your loan as soon as possible.

Finally, it’s important to note that payment deferrals are not a permanent solution and may only be available for a limited period. This means you should learn how to budget to make payments again after the deferral period.

Tips for Personal Loan Payment Deferral

Do you think this option sounds right for you? Great. However, before signing any paperwork, here are a few tips to remember when considering a personal loan payment deferral.

Communicate With Your Lender

It’s important to contact your lender as soon as possible if you’re having trouble making payments. Let them know your situation and see if a payment deferral is possible. Your lender wants to help you avoid defaulting on your loan, so don’t hesitate to ask for assistance.

Understand the Terms and Conditions

Make sure you understand the terms and conditions of your payment deferral. Ask your lender to explain any fees or interest charges that may apply. Most importantly, take time to read the fine print before signing anything.

Make a Plan

A payment plan is a temporary solution, so it’s important to have a plan to catch up on your payments once the deferral period is over. The longer you wait to make payments again, the more interest you’ll accrue, so it’s best to start paying back your loan as soon as possible.

Get a Loan Fast

So, what is a payment deferral? They’re an option that allows you to delay your payments for a specified period while continuing to accrue interest.

If you’re having trouble making payments, though, you might look into a fast loan. At Easternloans, you can apply for a loan conveniently online and receive the funds you need in as little as 24 hours. This can help you catch up on missed payments and avoid late fees or finance other important purchases.

Plus, our team of experts is always available to answer any questions or concerns you may have along the way. Don’t let financial stress hold you back — let us help you access the cash you need today. Apply now!


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