Reply To: Hi What is a deferred payment, and how is it different from an usance letter of c

[Rasvya Banu]

There isn’t a big difference between a deferred payment and a usance letter of credit. Both of these terms mean that the payment is put off, which does give the transaction more time.

The main difference between the two letters is that one has a draft and the other does not.

In the usance letter, there is a draft that technically has nothing to do with the document or the transaction.

This draft isn’t in a deferred letter, but it doesn’t really matter to either party.