If you have an installment loan and have started having trouble making your payments, all is not lost. After dealing with the effects of the Great Recession in the late 2000s, companies have come to understand that a customer who is trying to pay but can't is still a good customer. It makes no sense to penalize people like this heavily. As a result, many companies have started offering more ways to work around a temporary problem with repayment. Contacting the loan company is essential, but once you do that, you can find options that help you get back on track.
Temporarily Reduced Amount
One solution is having a short run of payments where the amount due is reduced. That won't reduce your overall debt, but it gives you a few months of breathing room that better fits your budget. Sometimes the companies will allow you to apply again for a reduced amount at the end of the first run. You may have to provide statements showing what your income was during the past month or so, but other than that, the application should be simple.
Refinancing
If you've been making your installment payments for a while and have paid off a substantial amount of the loan, take a look at how current interest rates compare to your loan's rate. You may be able to refinance the debt. The number of payments you will have to make will increase, but your interest and the amount due could shrink by enough to make the installment payment much easier to deal with. Be sure the interest rate is fixed, though, to avoid surprise increases in payment amounts in future months.
Hardship Deferments and Skips
Sometimes companies offer hardship deferments or the option to skip a payment without any adverse effects on your loans. Not everyone is going to offer these, but they are worth asking about. You might have to apply for the deferment; a one-month skip may need just a phone call. However, do not assume that you can just skip a payment without talking to the company handling the loan. Be aware that deferments and skips will increase the compound interest you have piling up on the loan.
Do not worry if you can't make a payment. Contact the loan company and explain what's going on. The company should have options available to help you weather this bump in the road and to continue making your payments. If you have more questions, contact a lender like Las Vegas Finance.
