You bought the car, got a great, affordable rate on your car loan and, still, the unexpected took over. Say you lost your job, received an unexpected hospital bill or had to take in a family member; whatever the trouble, you’re now falling behind and need help with car loan payments.
So what should you do?
Contact your auto loan lender – the sooner, the better!
Option 1 – get help with car loan payments
It’s easier to work through a problem than to avoid it. By reaching out as soon as possible–and by letting your financier know why you haven’t been able to make your auto loan payments–you may be able to get help by deferring a payment or two, or refinancing your existing auto loan.
For example, at Dane County Credit Union, we can work with you to lower your monthly payments by spreading the loan out over a longer period of time. Yes, that means you will pay more interest in the long run, but it could get you out of your temporary money pinch.
Option 2 – help yourself
If you’re not too far from hitting your payments, review your monthly budget and see if you can pinch pennies elsewhere until you’re back on your feet.
Option 3 – unload the burden?
If the situation becomes dire, you may be best off selling your car to pay off the remainder of the loan. If you owe less than the vehicle’s value, you can use the sale to rid yourself of the debt. However, if you owe more on the car than it’s worth, you may have to borrow money to pay the remainder of your loan off after the sale – but since it will be a smaller amount to finance than your loan had been, payments will be much smaller.
But let’s not get too far ahead of ourselves here! The most important thing is to reach out as soon as you realize you can’t make your payment. While the worst-worst case scenario involves repression of your car, most financial institutions, especially Dane County Credit Union would love to keep your credit score afloat and avoid that, even in tight times.
Reach out for help!
If you’d like to talk about refinancing your auto loan, we may be able to help you lower your rate or lengthen your loan term. Don’t hesitate to call us at 608-256-5665 or visit any of our Madison-area branch locations. We’re more than happy to sit down with you and do what we can to keep you keeping your best financial foot on the gas pedal.