No matter how well you manage your money, you can't control unexpected expenses. When you find yourself owing more than the amount you have in your checking account, the option of deferring your car loan is a possible solution. However, before a lender will agree to defer your car loan, he may look at factors such as your past payment history, the reasons you need the deferral and your credit score.
Call your lender as soon as you realize you won't be able to make your car loan payment. Explain that you're unable to make your car payment and ask about deferring your car loan.
Offer the lender specific facts and details about your financial situation. A lender needs justification to grant you a deferral. For example, if you had an unexpected emergency expense due to the repair or replacement of a major appliance in your home, and it caused you to go over your budget, tell the lender.
Ask the lender's representative questions about how long the deferral will last -- typically 30 days -- when your next payment is due -- likely the following month, depending on your payment schedule -- and if you'll have to pay any fees as a result of the deferral. Note that fees for deferment -- if applicable -- can vary, according to the lender's specific policies.
Write down all of the information -- representative's name, phone number, extension, date and time of call, fees and deferral details -- for future reference. While the lender may mail you a copy of the agreement to defer your car loan, it's helpful to have a record of the phone call and what you discussed.
- Ask the lender if your credit report will suffer as a result of the deferral. Lenders report payment history to the credit bureaus. If the lender tells you that it will report a positive payment history in connection with the deferral on your loan, ask for that promise in writing, recommends the Consumers Union website.
- You may have a deferment agreement written into your loan. Some lenders offer this up-front. However, you still need to request the use of the deferment.
- Lenders often limit the number of times they will grant a deferral during the life of a car loan. Carefully weigh all of your financial options before choosing a deferral.
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