Learn more about the pros and cons of some of the options that may be available to you so that you can determine the best way to keep your car and manage auto loans during coronavirus pandemic.
If you think you may fall behind on your auto loan, call your lender and explain your situation. The sooner you contact your lender, the more choices the lender may be able to offer you. And since it’s often more expensive for a lender to repossess your car than to work with you, your lender may be able to offer options that help you make your payments. Working with your lender also demonstrates a good-faith effort on your part to repay your debt. Learn more about the pros and cons of some of the options that may be available to you so that you can determine the best way to keep your car and manage auto loans during coronavirus pandemic.
Option 1: Change your payment date
You probably arranged your date of payment to be after the date of your paycheque. If circumstances have changed, ask your lender to change the date your payment is due.
Option 2: Request a payment plan
If you foresee a problem meeting your payments, or if you have already fallen behind in your payments, your lender may be able to offer you a “payment plan” to help you in the short term or to catch up and repay missed payments.
Option 3: Ask for a payment extension/deferral
If you are unlucky enough to be experiencing financial hardship that is going to last longer than can be helped by the payment due to date change, i.e. your regular payment(s) consistently increase your indebtedness, and a payment plan is not the right solution, there is a further option. You can ask your lender for a payment extension/deferral.
Option 4: Refinance your auto loan
When you took out your loan it was appropriate to your circumstances and the options available. The circumstances and options have changed. It is likely that your current lender will continue to offer you the best option available BUT you should review the alternatives.
Managing your auto loan during coronavirus pandemic is crucial. You should at least consider the option to trade-in your current auto for a more affordable one. If you sell or trade-in your current vehicle, its value, and how much you still owe will be an important factor in your decision. Talk with your lender about the benefits and costs of each option and determine which one works best for your situation.
