If you lost your job during the pandemic or your income was reduced, you may be concerned about how you will continue paying your bills, such as your car loan.
If you are unable to make your car loan payments during this time, here are some suggestions:
Ask for a deferment
The first thing you can do if you are having trouble making your loan payments is to ask for a deferment. A loan deferment is a request to delay your monthly payments for a specific period. Once that period ends, the monthly payments you skipped will be added to the end of your loan. An obvious downside of a deferment is that the length of your loan will be extended. However, it will allow you to avoid late fees and added interest while you get your finances in order. Many lenders are sympathetic during this time and are evaluating deferment requests on a case by case basis.
Check for special offers
During the pandemic, many lending institutions announced special programs to assist both existing clients and new clients who wish to purchase a vehicle. You should note, however, that not all buyers may qualify for these offers. In most instances, lenders may look at your credit score and other factors before extending payment relief. Also, since approval for payment relief will take some time, it is important that you do not wait until the day your loan payment is due to reach out to your lender.
Sell your car
If you do not believe you will be able to resume your loan payment anytime soon, you may want to opt for selling your vehicle. This is a suitable option if the car’s value is higher than the balance on your loan. Once you’ve sold your vehicle, you may then purchase one that has lower monthly payments, or you may lease a car if you still have a high credit score. But if you owe more on the loan than what the car is worth, your lender may demand that you pay the difference between the sale price and the loan balance. If you choose not to sell and you continue to miss payments, the lender may repossess your vehicle and add the repossession cost as well as auction fees to the balance of your loan.
Do you need to defer your Instant Auto Loan payments?
If you are an existing client at Instant Auto Loans, and you are having trouble making your loan payments, contact us today to discuss your options. And if you are looking to buy a new car, we can help with that also. We will give you a car loan based on the equity in a vehicle you already own.