If you’re like most people, having a reliable means of transportation is essential. If you don’t live close to your workplace or have convenient public transportation available, it’ll be hard for you not to own a vehicle.
Now, if you find yourself falling behind your car payments, that’s where it gets tricky. There’s a good chance your ride will be taken away from you. Without a car, it’s going to be problematic to get around. Going to work will be much harder and, if you have tardiness, you might get fired! That means you can’t pay off your car, then you get trapped in a vicious cycle.
Don’t panic. There are things you can do to avoid losing your vehicle and ruining your credit score.
Talk to your lender. If you’re about to fall behind on your car payments, get in touch with your lender. Be honest with them and try to work something out. If you think about it, the last thing they want to happen is for you to default on your car loan.
So, reassess your auto loan and see if they can give you consideration because you are struggling to make your car payments.
Modify your loan. There are many reasons people are struggling to make their car payments. It could be an unexpected expense like a medical emergency. You may have lost your job or in between jobs.
Whatever the case may be, your financial hardship may only be temporary. So, there’s a chance you can request a loan modification if you’re just missing a few payments.
Try to refinance your loan. See if your lender is open to lowering your car repayments by extending the duration of your loan. This could be a quick solution for you while you are trying to catch up on your monthly payments. However, be aware that the longer your loan is, the more you will be paying over time due to interest fees.
See if your lender can give you a deferral. If you think you’ll only be behind in making your car payments for a short time, you can request a deferral. This might give you the breathing room you need to catch up on your payments. If you intend to ask for a deferral, be sure you only have to do this for a month or two.
Ask for help. You might be doing well with handling your other expenses except for your car payments because it’s just too expensive. So, see if you have a family member or a relative who is willing to give you a helping hand.
You can also look for people who might be interested in taking over your lease. They might find it affordable, and your lender may consider letting others assume your loan.
Consider reducing your other expenses. Sometimes, you may overlook your other expenses, like Netflix subscription or things that you don’t really need. Try to remove or at least cut down your expenses so you can save money and be able to afford your car payments.
You may need to make sacrifices for the greater good, especially if you are determined to keep your vehicle. Sometimes, all it takes it to make a few lifestyle changes to cope up with your monthly expenses.
Prepare for the worst-case scenario. Be ready to turn in your car keys if you can no longer afford to pay your monthly payments. You just have to bite the bullet, sometimes. It can’t be helped. But don’t lose hope. You may lose your car for now. But there’s still a chance for you to find a lender that is willing to give you a second chance.