Department | New Car Loans

Is Missing One Auto Loan Payment Bad?

Missing a payment on your auto loan can be a very serious thing. Even one missed payment can lead to a mark on your credit score. The lender also has the right to repossess your car if you miss a payment or for any violation of the auto loan contract. The lender has the ability to sue you for the deficiency if he/she sells the car for less than you owe. You need to keep in mind that there is no universal policy on late payments, so you need to make sure that you understand your particular lender’s policy. Getting yourself into a mess like this can cause you to actually pay more in the long run. Your best bet is to avoid late payments to preserve your credit score.

If you can’t make a payment or you run into financial difficulty, there are steps you should take to prevent hurting your credit score or possibly having your car repossessed. First, talk to your creditors. Explain your situation and the reason your payment will be late and see if you can work out a repayment schedule. Since the auto loan lenders want to get their money back, they will probably be willing to cut you some slack the first time and maybe the second. However, if they see that this is going to be a recurring problem, they might have you seek alternative plans. You can also refinance your auto loan. You may be able to get a better rate, extend the payment term, and skip a few payments in the process.

Everyone runs into hard times at some point, but ignoring your auto loan payments will make your financial troubles much worse. Maintaining good credit is important to your financial future. Lenders understand that people run into difficulties and will most likely be willing to work with you as long as you approach them promptly. Always remember that having a high credit score helps you in the long run. Don’t risk ruining the credit score you’ve worked so hard for with one late payment.

The most important thing to remember is that you are trying to maintain a good credit score in order to preserve your financial well-being. Paying your bills on time and making sure you have enough money every month will ensure that you will come out on top. If you run into financial problems, always talk to your lender to come up with a contingency plan.