How to Use the Benefits of Deferred Interest

How to Use the Benefits of Deferred Interest

Deferred interest is a tool you can use to make large purchases without losing too much money. This tool can also be used to give you more time to pay off debt, but there are both risks and benefits associated with using deferred interest. Learning how to use the benefits to your advantage might offer you greater financial opportunities, however, if you are struggling with bankruptcy, talk to a Tullahoma bankruptcy attorney about the next steps.


You may have been offered a deferred-interest plan before. Many people may have been offered a credit card with no interest for 12 months if paid in full within those 12 months. This is a common type of deferred interest plan, targeted at credit cards. Deferred interest plans may also be offered for loans.

The way interest usually works is you would owe money to someone and the longer you take to pay off that money, the more the total amount increases. Deferred interest delays the buildup of that interest for a certain period of time. As long as the person pays off all the owed money by the end of that time period, no interest will be added to the total amount.

Not paying off the total money owed by that time period comes with a cost. If this happens, the person will have to pay all the interest that would have been added during that time period. For example, someone may have a deferred interest plan for six months. If they fail to pay the total amount within those six months, then that six months’ worth of interest will be added to the total amount.


The main benefits of deferred interest are making larger purchases within a shorter period of time. If used correctly, deferred interest can save you a lot of money compared to what would normally be paid. Some people may apply for deferred interest on a loan to give them more time to pay off what they owe.

There are also risks of deferred interest. For one, failing to pay the amount in full could result in owing significantly more money. The same thing can happen on certain deferred interest plans if payments are not made on time. Understanding the rules of the deferred interest program you are signing up for is vital.

Many people also wonder if deferred interest programs are available for student loan debt. This depends on the type of loan. With student loan deferment, some student loans will continue to build interest while other loans will not. Finding out which loans will not build interest for you can be important for giving you more time to pay off your loans.


You might not have to go through the pains of bankruptcy alone. Feel free to call us today at Tom Bible Law by dialing (423) 690-7712 for a consultation. Our Tennessee bankruptcy lawyers are prepared to help you explore the best bankruptcy options for your given financial situation. We can be found throughout the Tennessee cities of Chattanooga and Tullahoma.