Perhaps you bought your dream car or truck, and suddenly, you’ve fallen on tough times and you’re having difficulty making those payments. Maybe it’s time to consider a loan modification. Your BBB® wants to provide you with information that may help in reducing your monthly payments.
According to an article on bankrate.com, 1.9 million vehicles were repossessed in 2009. Much of the reason was due to the downturn in the economy and higher energy costs.
If you’ve experienced a change in your economic situation, and you find that making those monthly payments are more difficult, then you may want to consider contacting your lending institution to see if they will work with you to refinance your vehicle. Depending on your credit score, FICO, you may be able to negotiate a lower interest rate, but it may also mean that you need to extend the term of the repayment period. Usually lenders are more interested in wanting you to keep your vehicle and to keep making those payments rather than repossessing it.
Bankrate suggests the following tips for consumers in that situation:
- Try to work out an arrangement with your original lender before your payment is past due.
- Submit all required paperwork right away.
If you do qualify for a refinance, Bankrate suggests doing the following:
- Ask if the modification will affect your credit bureau report negatively.
- Make sure you get the name and number of the representative helping you and call at least once a week to check on the status of the application.
- Read the terms of the new loan carefully. Oftentimes, a late payment will nullify the new loan.
Even if your vehicle ends up being repossessed, you still may not be off the hook, even if your vehicle is resold. There are cases where the repossessed vehicle may be sold for less than what you paid for it, and you’re still responsible for the difference.
If you need to shop for a business that offers a better option for you, check out bbb.org and look for financial institutions in your local area. Remember to “Look for the Seal,” and Start With Trust® at bbb.org/evansville.