Understanding Skip a Payment and Defer a Loan Payment Programs

The end of the year can be a stressful time for many people, with holiday expenses piling up on top of regular financial commitments. That's why many credit unions, including SCU Credit Union, offer programs like "Skip a Payment" or "Defer a Loan Payment" to provide a little financial breathing room during the holiday season. Let's explore how these programs work, who they benefit, and what to consider before applying.

What Does It Mean to "Skip a Payment"?

When you skip a payment, you essentially delay making a loan installment for a specified period, such as one month. The skipped payment is then typically added to the end of your loan term. This means the final payment date is extended by the amount of time you chose to defer the payment.

How Does the Holiday Defer-a-Loan Payment Program Work?

SCU Credit Union's Holiday Defer-a-Loan Payment Program allows qualifying borrowers to defer a loan payment during November, December, or January. This helps members manage their finances better during the holiday period, when expenses can spike due to gift purchasing, travel, and social gatherings.

Eligibility for the Program

To participate, borrowers must meet specific criteria. It's important to check whether the loans you hold qualify for deferment. Typically, secured loans like car or RV loans and unsecured personal loans are eligible. However, mortgages, credit cards, and home equity loans are often excluded.

The defer – a - payment is not eligible for Credit Cards, Mortgage Loans, Home Equity loans or Line of Credit, Home Improvement, and Overdraft Protection loans at SCU Credit Union. 

How to Apply

Applying for a deferment is straightforward. Borrowers can fill out the necessary form online to ensure their personal information remains secure. A fee of $50 is charged for each loan deferment request. Make sure you understand the costs involved before proceeding.

Benefits of Skipping a Loan Payment

One of the main benefits of skipping a loan payment is the immediate relief from making a regular payment. This can free up funds for holiday expenses, reducing financial strain during a busy time of year. The program also provides peace of mind knowing that you're in good standing.

Things to Keep in Mind

While skipping a payment might sound like a quick fix, it’s essential to consider the longer-term impact. Here are some things to keep in mind before deciding:

1. Loan Term Extension: Skipping a payment will extend the life of your loan. This might not be an issue right now but could affect your long-term financial planning.
2. Accrued Interest: Even during the deferment period, interest will continue to accumulate. This means you could end up paying more in interest over the life of the loan.
3. Final Payment Size: Depending on your specific loan terms, your final payment might be larger than your usual installment if you defer a payment.
4. Automatic Payments: If you have auto-pay set up, double-check to ensure that the deferred payment will not be deducted from your account.

Making the Best Decision

Understanding when and why to defer a loan payment is crucial. Such programs offer valuable relief but require careful consideration of your financial situation. Assess both immediate benefits and long-term implications before deciding if skipping a payment is right for you.

By fully educating yourself on skip a payment and defer a loan payment options, you can enjoy the holiday season with less financial stress while keeping your financial health sound. Should you have questions, you can always stop by one of our branch locations for assistance or reach out to our member service call center at 781-784-7725 or toll free at 1-877-661-3300