Handle Late Car Payments
This article provides some of the most important things that car loan and bad credit car loan holders should do in the event that they have incurred late payments. This could help them handle the situation as well as the consequences involved.
Steps
- Contact and inform your current lender. One of the oldest practices that car loan holders usually do when they know that they will not be able to provide the needed payments for their vehicle loan is to avoid the lenders and pretend that nothing happened. But this strategy will only complicate things instead of solving the problem. The best thing that you should do is to call or visit your current lender and notify them that you will miss your car payment for a particular month. Through this, your lender would know your reasons why you couldn’t provide the payments. So instead of running after you for such a missed or late payment the lender would probably figure out a better set-up so as to help you. What most car loan holders don’t know is that lenders are also willing to help their customers in any way they can.
- Try to sell the car. Another effective method to deal with the possibility of late payments is to sell the car. In order to sell the vehicle you must first pay the existing loan off. Given this, you can look for a car buyer and negotiate with him. You can use the payment that he would provide to pay the remaining loan balance. You can also pay the loan off by using the money from your buyer and your personal money too. Through this, the lender would clear the vehicle’s lien making the transfer of car’s title to the new owner more manageable.
- Have the car voluntarily repossessed. Car loan holders who cannot provide the needed payments for the loan can also have the vehicle repossessed. However, this condition could still cause negative effects on their credit report. This is because they still owe their lenders some money which is the remaining amount after deducting the money collected from selling the car in an auction. This remaining amount is known as a "deficiency balance," and it should be paid by the borrower so as to improve their credit conditions. The only advantage that you would surely obtain from voluntary repossession is to avoid paying the repossession fees that the lender would charge you in the event that they would hire a repossession company to confiscate your car due to failure to provide the needed payments.
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