THE SHORT · CREDIT
The “free” skipped payment costs you $58 and two extra months
Skipping a payment does not pause the interest. The principal does not move, the month's interest is added to it, and the loan restarts higher than it was.
Your lender offers to let you skip a payment. The wording is always generous: "a month's breathing room", "a month on us". What is on them is the payment. Not the interest.
Your car loan: $8,400 at 6.90%, payment of $289.
| Time left | Total paid | |
|---|---|---|
| Without skipping | 32 months | $9,217.95 |
| With one month skipped | 34 months | $9,276.14 |
| The "free" month | +2 months | +$58.19 |
During the skipped month, interest keeps running: 8,400 × 6.90% ÷ 12 = $48.30. Nobody asks you for it that month — it is simply added to your principal. The following month, your loan is bigger than before.
Two extra months for one skipped: that is not a maths error. Your payment repays both principal and interest; skipping it loses you the principal part and adds the month's interest. The delay catches up twice.
$58 for a month of breathing room can be a good deal: when the alternative is a cash advance at 22%, it is the better of the two. What is not acceptable is believing it free — because a gesture you believe free is one you repeat.
Yoseri's Debt page shows the end date of each loan and recalculates it when a payment changes. It is that date, not the payment, that says where you stand.
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