It is definitely not a good position to be in, to have lenders come knocking at your door when you miss your car payments but there are steps that you can take if you find yourself struggling to meet your financing commitments. With a little fast action, you may be able to rectify the situation and find a compromise to the situation that doesn’t involve lawyers or more debt!
Step 1 – Inform your lender
Don’t be afraid of your lender if you know that you are unable to meet an upcoming payment! We know that the first reaction is to wait and hope that things will improve but rather than hiding and knowing they will eventually come banging, why not take the initiative to solve the problem! Chances are that your lender would be thankful that you are upfront with the reason why you cannot meet the payment and in the best case scenario, they might even be lenient and grant you a week or two of grace to address your obligations.
Step 2 – Work things out
Like we mentioned, once you’ve informed your lender, you should try to work out how best to appease them! Unfortunately, most loans are done by contract and that means strict financial obligations – which means that you had best get the money to them as soon as possible! But if you are otherwise prompt and reliable with your payments, it should be quite easy to come to an agreement.
Step 3 – Make restitution
The easiest way to solve issues of late car payments is to make the car payments and late fees if any. If that was all it was, then hopefully you can go back to the original agreement! Just remember to keep paying on time after this lesson learnt! But if you don’t have the cash to make payments, the solution may be a bit more painful – if the car was up as a security, you can offer to have the car repossessed. Your credit score may be affected, but at least your lender will be appeased.
Worst case Scenario – sell the car!
If you have missed a number of payments, you might not be in a position to negotiate with your lenders, but at the same time, you need to think about your personal situation and whether further measures need to be taken so that you don’t lose your home or face being sued by the lenders for defaulting on the payment. The simplest step to rectifying the situation may be to sell the car and transfer the money from the sale to the lender to settle any accounts.
It is terribly stressful to think about what might happen when you miss your car payments, but keep calm and follow the few steps here to help you get the situation under control. The best thing you can do is to be upfront about your situation with your car financing company so that a solution can be found as soon as possible!