Sometimes managing unexpected expenses, medical bills, rent, utilities, taxes, and more can all be an extreme financial burden. In such cases, you can think about making a deferred payment option and postpone some of your monthly payments. Manage your immediate expenses with ease and defer your loan payment.
Let us read about what a deferred payment is and how does it work?
What is deferred payment?
Deferred payment is when you purchase something now and pay for it later. It is a feature that lets borrowers pause their credit payments for a specified period, usually for a few months to a year. This choice offers temporary relief from the pressure of monthly loan payments, which can be especially helpful for borrowers who are facing financial difficulties or unexpected monthly expenses. Depending on the policies of the lender and the conditions of the loan arrangement, interest may or may not accrue during the deferred payment period.
While some lenders could allow borrowers to postpone both principal and interest payments, others might impose interest during the postponement period. Therefore, before deciding to use the deferred payment option, it is crucial to thoroughly review all the terms and conditions of your loan agreement as there may be extra costs or penalties attached to this feature.
How deferred payment works?
The deferred payment option works when borrowers pause their loan payments for a predetermined time. Borrowers are not obligated to make any loan payments during this time and depending on the practices of the lender and the conditions of the loan, interest may or may not accumulate.
Deferred Payment Examples
These are some of examples of deferred payments:
Student loans: Several student loans allow borrowers to make deferred payments until they complete their graduation or for a certain period.
Additional read: Personal Loan for Higher Education
Car loans: A few car loan providers also offer deferred payment options, letting borrowers postpone their initial payment for a while. This might be beneficial for those who need more time to accumulate funds for their car payments or for those who are having trouble making payments.
Credit cards: Some credit card issuers also provide cardholders with the option of deferring payments for a specified time frame.
Mortgages: Due to financial difficulty or other exceptional circumstances, several mortgage lenders offer a payment deferral scheme that enables borrowers to temporarily postpone their mortgage payments.
The deferred loan option is a popular feature, which allows you to postpone your monthly repayments. This serves as a significant financial advantage. Delaying payments for a time when you are in a better financial position is one of the biggest advantages of deferred payment. While it can offer short-term financial comfort, it could also harm your credit score and increase your overall interest payable. To choose the best course of action for such a situation, it is advisable to consider all your financing options and speak with a financial advisor or lender.
Although Bajaj Finance does not offer the deferred payment option on personal loans, we do offer a similar service, which is the Flexi Hybrid Loan. This is one of the unique variants of personal loans offered by us. Here, you can choose to pay interest-only EMIs for the initial tenure of your loan thereby reducing the financial burden of making EMI payments during that period of time.
Visit our personal loan page for more information.
