How does the deferral work?

A deferral on an equipment financing loan means that payment of both principal and interest are suspended for a defined period of time and the amortization period on your loan is extended by the same number of months as your deferral period. During this time, interest still accumulates at the applicable rate, as set out in your Loan Agreement, on the outstanding principal balance. If you have life and/or disability insurance on your loan, those premiums will continue to be debited from your account to maintain your coverage.

A deferral on an equipment financing lease means that the monthly lease payment is suspended for a defined period of time and the lease is extended by the same number of months as your deferral period.

How does repayment work?

For loans

When your payments resume after the end of the deferral period, your payments will continue as per the existing payment arrangement. We apply your payments first towards all interest accumulated during the deferral period (typically part of your payment goes towards interest and part towards your outstanding principal balance). Interest will also continue to accumulate at your applicable rate on the outstanding principal balance. Once all interest accumulated, as a result of the deferral period has been paid, payments will resume being applied in accordance with your loan terms.

Also, despite the amortization period being extended by the same number of months as the deferral period, the last payment of your term will increase. This increase is a result of the deferred payments, as you will not have paid all the principal and interest owing by the end of the amortization period of your loan.

For leases

When your lease payments resume after the end of the deferral period, your payments will continue as per the existing lease payment arrangement. Despite the lease being extended by the same number of months as the deferral period, there will be additional costs as a result of the deferred payments, and these costs will be added to the purchase option due at the end of the lease agreement.

What should you consider?

Deferring payments may significantly increase your interest costs over the life of your loan and/or lease, so it's important to evaluate your financial situation and priorities before exercising this option. Please discuss with us what deferring your payments may cost.

Repayment strategies

If you are concerned about not having sufficient funds available when your payments resume, please connect with us prior to the end of the deferral period to explore more manageable options.

To help reduce the impact of increased interest costs, you are able to repay deferred payments at any time during the term of your loan and/or lease without penalty. Please connect with us directly to repay any deferred payments early, so we can ensure they’re applied correctly.