As soon as you miss a payment, or are late with it, your loan is in default. Different lenders will approach this situation in different ways, but if you check your loan agreement, you will find out what the policy is of the company that you are dealing with.
The worst thing you can possibly do if you know that you will not be able to make a payment is to ignore the situation. It won’t go away, and will only get worse. The first thing to do is to contact the loan company and explain the situation. You can be sure that you are not the first person this has happened to and they will more than likely have policies in place to help you. After all, they don’t want the situation to get any worse, either, and if they extend your loan for you so that your monthly payments are more manageable, they are going to get more interest from you, so it’s a win win situation.
If you think the problem is going to be long term, you have a couple of solutions before you get into default. You can sell your car, so that you can pay off what you owe and no longer have that particular debt, or you could consider re-finance.
If your payments up until this point have been fine, you will find that your credit score will have improved so you may find that another company will be prepared to take the loan over, with more favourable terms so that you find the payments easier to cope with.
The last thing you want is for your car to be repossessed because it will be sold at auction for probably far less than it is worth, and you will still have to pay the outstanding debt, and have nothing to show for it.
The worst thing you can possibly do if you know that you will not be able to make a payment is to ignore the situation. It won’t go away, and will only get worse. The first thing to do is to contact the loan company and explain the situation. You can be sure that you are not the first person this has happened to and they will more than likely have policies in place to help you. After all, they don’t want the situation to get any worse, either, and if they extend your loan for you so that your monthly payments are more manageable, they are going to get more interest from you, so it’s a win win situation.
If you think the problem is going to be long term, you have a couple of solutions before you get into default. You can sell your car, so that you can pay off what you owe and no longer have that particular debt, or you could consider re-finance.
If your payments up until this point have been fine, you will find that your credit score will have improved so you may find that another company will be prepared to take the loan over, with more favourable terms so that you find the payments easier to cope with.
The last thing you want is for your car to be repossessed because it will be sold at auction for probably far less than it is worth, and you will still have to pay the outstanding debt, and have nothing to show for it.
