A payment deferral pushes back your payment due date. This effectively extends your original loan term. For example, if your payment is due at the end of April and you are granted a 2 month payment deferral beginning said month, your next payment will be due at the end of June. If you had 5 months left before your loan is repaid, your loan term will be extended from 5 to 7 months. Interest continues to accrue on the outstanding principal balance over the course of the deferral period.