During the COVID-19 situation many creditors are offering deferred payments for everything from Credit cards and Auto loans to Mortgages, but what does that mean for you?
A deferred payment is one that you do not need to make at the current moment. Each creditor has their own guidelines for how long they will defer payments or how they expect those payments to be made up. It does not mean that those payments are forgotten or will never need to be made.
In the short term it can possibly buy you a little breathing room as some creditors are offering 1-3 months of deferred payments. During this time some creditors may offer to not report you as late, or may not even charge you interest. After the deferment period is over each creditor has their own guidelines on how they would like those payments made up. Some may want all of the deferred payments to be made after the deferral while others may allow you to spread those payments out over longer periods.
It is important for you to ask your creditors exactly how they will except payments to work so that you can be prepared. Overall deferments may buy you more time to improve your situation, you just want to make sure that you are ready for what happens after the deferment especially with your mortgage or auto loans.