A credit union skip-a-payment program lets you postpone one monthly loan installment, usually for a fee of $25 to $50, without the missed month counting as late. Your due date and payoff date each move forward by one month, your account stays current, and interest keeps accruing on the balance during the gap. It’s a useful short-term cash flow tool, not free money.
How the Deferral Works
You ask the credit union to push one scheduled payment to the end of your loan. The credit union records the move as a deferral, not a refinance, so you don’t sign new loan documents or go through underwriting again. Your final payoff date extends by a month, and interest continues to accumulate on the unpaid principal during the skipped month.
Some credit unions offer the program year-round. Others run it only during promotional windows, often around summer or the December holidays when members face heavier spending. Check your credit union’s policy before you count on skipping a particular month.
Who Qualifies
Eligibility rules vary by institution, but the common requirements look similar:
- Your loan must be current, with no late payments in the previous six months.
- The loan usually needs to have been open at least 90 to 180 days.
- Some credit unions require an outstanding balance above a threshold such as $3,000, so loans near payoff may not qualify.
- A few institutions cap eligibility at loans below a certain APR, which can exclude higher-rate loans.
Loans That Usually Qualify
Fixed-payment installment loans are the sweet spot. Auto loans and personal loans are the most common candidates, because the predictable payment structure makes it simple to shift one installment to the end of the amortization schedule.
Loans That Usually Don’t
Mortgages and home equity lines of credit are almost always excluded. Escrow for taxes and insurance, plus separate federal mortgage servicing rules, make a one-month deferral far more complicated for those products. Credit cards and other revolving lines don’t qualify either, since there’s no fixed installment to skip when the minimum payment changes each month. Single-payment notes, overdraft protection loans, and any loan already in a workout or bankruptcy arrangement are also typically off the table.
What a Skip Actually Costs
Skipping a payment doesn’t pause interest. Interest accrues every day based on your outstanding principal, and during the skipped month that daily interest piles up with nothing to offset it.
Take a $15,000 auto loan at 5.5% APR. The daily interest charge is roughly $2.26, so a 30-day skip adds about $68 in interest that wouldn’t exist if you’d made the payment. That amount gets added to what you owe, and because your principal stays higher for longer, every remaining month’s interest calculation is slightly larger. The total extra cost over the life of the loan from a single skip generally runs $50 to $150, depending on your balance and rate.
When you resume the following month, your first payment back goes heavily toward the accumulated interest rather than principal. The month after a skip can feel like treading water, because it essentially is.
Interest Capitalization
At most credit unions, the interest that built up during the skipped month is folded into the loan balance. Once that happens, you’re paying interest on a slightly larger principal going forward. On a simple-interest auto loan the effect is modest, but it compounds over the remaining term. The longer your remaining term and the higher your rate, the more the capitalized interest costs you.
The Processing Fee
Expect a processing fee of $25 to $50 per skip. The fee has to be available in a linked account at the time of the request, because the credit union typically debits it immediately upon approval.
How Often You Can Use It
Credit unions cap how many times you can skip. Most limit the benefit to two skips per rolling 12-month period per eligible loan. Many also set a lifetime cap, with six total deferred payments over the life of a loan being a common ceiling. These limits keep the program from being used as a crutch that dramatically inflates the loan’s total cost.
If you’ve already used your annual skips and then run into real hardship, you’ll have to look at other relief options rather than another deferral. Using up your skips for convenience in January and February leaves no safety net in October when something breaks.
How to Request a Skip
You’ll need your loan account number, including the loan suffix identifying which specific loan you want to defer, the calendar month you’re requesting, and the processing fee in an accessible account. Both the primary borrower and any co-signer need to authorize the request, since the deferral changes the repayment timeline for everyone on the note.
Most credit unions accept requests through online banking, by mail, or in person. Online is fastest. Expect approval to take three to five business days regardless of how you submit.
Submit Early and Stop Any Outside Autopay
Submit the request at least five business days before your due date so the deferral is in place before your payment pulls. If you pay through the credit union’s own automatic payment system, approval usually pauses the next payment automatically. If you pay through an outside bill-pay service, an ACH from another bank, or a recurring transfer you set up yourself, you have to cancel or pause that transfer. The credit union can’t reach into another institution’s system to stop a payment you initiated elsewhere.
Failing to stop an outside automatic payment is the most common mistake with these programs. Reversing a payment after the fact is far more trouble than pausing the transfer ahead of time.
Does Skipping Hurt Your Credit
An approved skip-a-payment doesn’t show up as a missed payment on your credit report. Because the deferral is authorized by the lender before the due date passes, the credit union reports the account as current. Your credit score shouldn’t be affected by using the program as intended.
The protection only applies if you follow the process. If you stop paying without approval, or your request is denied and you skip anyway, the credit union reports a delinquency like any other missed payment. The approval has to be in place before the due date arrives.
When a Skip Makes Sense
Skip-a-payment works best as a short-term bridge for a specific, temporary cash crunch: an unexpected medical bill, a gap between jobs, a seasonal dip in self-employment income. For a modest cost, it buys 30 days of breathing room, which can be the difference between staying current on everything and falling behind on something with steeper consequences.
It makes less sense for discretionary spending. Skipping a car payment to fund a vacation effectively finances the trip at your auto loan’s interest rate plus the processing fee. If you want to skip every time the program is available, the real problem is a budget gap a deferral can’t fix.
Alternatives for Bigger Problems
If you’re facing more than a one-month squeeze, a single skip probably won’t be enough. Most credit unions offer other options:
- Loan modification, which extends your term or adjusts your rate to lower the monthly payment permanently. It requires new underwriting but addresses an ongoing affordability problem.
- Hardship forbearance, similar to a skip but available for longer periods and sometimes without a fee, typically reserved for documented hardships such as job loss or medical emergencies.
- Refinancing, which can lower your payment through a better rate or longer term without deferring anything.
Skip-a-payment is the lightest-touch option in that lineup: no credit pull, no new paperwork beyond the request form, and approval in a few days. For a genuine one-month gap, that simplicity is the point. Just know what the extra interest will cost you before you commit, and make sure the math still works in your favor.