What To Do After Missing An Installment Loan Payment
It’s all happened to us at some point. We have tons of financial responsibilities; gifts to buy, vacations to pay among other pressing financial issues. The financial burden is so huge that you may have to miss a payment on your installment loan. Besides, you have a mortgage to pay and a car loan on top of it. Surely, an online installment loan payment can wait.
While most lenders will allow you to skip a payment (of course to their benefit), it is not ideal. First, you will bear the consequences when they send you your statement and the late fees accumulated are higher than you had anticipated. Secondly, it could ruin your credit, especially when you skip without informing your lender. You are human, and circumstances may force you to skip a payment. So, how d you go about it so that it does not affect your relationship with your lender?
- Inform Your Installment Lender
The first and probably most important step to take is notifying your lender of your inability to meet your expense. Most lenders have skip-a-payment options, anyway, so you will just e taking advantage of what they have put in place. Your request will certainly attract a fee, but it is better than skipping a payment and not informing them. Also, remember to inform the actual direct lender that’s servicing the installment loan. Not the loan broker.
- Do Not Make a Habit of It
Whenever you skip a payment, you lengthen your loan period, which translates to more interest charge. If you skip a payment this month for all your valid reasons, ensure to get back on track the following month. You could easily slip into the habit of making intermittent payments, which would not only increase your liability but also dent your reputation with lenders. Make a provision for your loan repayment each month so that you do not find yourself in a situation where you cannot pay.
- Make Up For It
If you can spare some cash, pay more than you are required. If you skipped a month o payment, you could pay double the next month, or as close as you can come to make up for that last payment. Of course, this will not save you from late fees but it will take your repayment back to what it was initially. You will hence reduce the interest expense proportionately. As a bonus, you may score some points with your lender, as they will note your commitment to paying off your debt.
- Extend your Repayment Period
Requesting for an extension should be your last option, as it increases your repayment period and your monthly expense altogether. However, if you foresee impossibility in meeting your monthly payment for a period longer than one month, it would be prudent to ask for an extension. This way, you will have a flexible repayment option and lower your financial liability. You will also not have to miss any other payment or risk having your wages garnished.
An installment loan is a liability that you have to pay off entirely for you to gain your financial freedom back. If you make sacrifices and prioritize your expenses, you may never have to take out another loan. Of course, that advice doesn’t do any good if you find yourself in a situation where the loan is past due. In that case, do everything possible to get back on track. Once things get back to normal, you’ll want to make a budget and do everything possible to pay off the loan as quickly as possible. Another course of action may be to refinance your installment loan. At Top Installment Loans we have a complete comparison of direct lenders. Use our site to find a lender that offers installment loans in your state. Settle on a decent company and make sure they are willing to refinance an installment loan.