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Behind on payments need advice

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Behind on payments need advice

Ok here's my story in a nutshell - I have a vehicle I'm behind two payments, have about 12 months left to the loan.   The car has major problems I would paid out loan and sell probably for less than I'm going to pay out on loan.   would a repossession hurt my credit more than the already two late payments I have now?   Appriciate any advice 

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Established Contributor

Re: Behind on payments need advice


SillySally wrote:

Ok here's my story in a nutshell - I have a vehicle I'm behind two payments, have about 12 months left to the loan.   The car has major problems I would paid out loan and sell probably for less than I'm going to pay out on loan.   would a repossession hurt my credit more than the already two late payments I have now?   Appriciate any advice 



As an FYI, just because the vehicle is repossessed doesn't mean you get to walk away from the loan.   The finance company will resell the car, but you will owe the balance of the loan after that sale plus towing fees plus late fees, etc etc.  Not to mention the major hit to your credit and the real possibility that you will only qualify for "loan shark" type rates for the next few years if you have a reposession on your report.

 

  Think of it from a bank's perspective...  Would you rather give an auto loan to a person that's just missed a couple payments, or one that has stopped paying altogether?

 

If you don't mind my asking, are you unable to make the payments, or just unwilling because the condition of the car?  With only a year left on the loan, if you are able, I would do everything in my power to pay it off as agreed. 

 

 

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Contributor

Re: Behind on payments need advice

You can ask for an extension explain your situation to your bank they can put those two payments to the back of your loan and you can pay it later. So you won’t mess up your credit anymore than what it is and you will become current again

Moderator

Re: Behind on payments need advice


SillySally wrote:

Ok here's my story in a nutshell - I have a vehicle I'm behind two payments, have about 12 months left to the loan.   The car has major problems I would paid out loan and sell probably for less than I'm going to pay out on loan.   would a repossession hurt my credit more than the already two late payments I have now?   Appriciate any advice 


A repo on your CR kills your credit score. it stays on for 7 years - unless the lender gets a judgment in which case the judgment will affect you for 10 to 20 years + renewals if unpaid.

 

A repo is a huge deal.  As pointed out earlier, a repo is the beginning of your troubles. You would still owe for the loan + repo fees + late fees + attorney fees and any other fee that is allowed by your loan contract.  Just because you don't have the vehicle doesn't mean you don't owe the money. A repo and judgment are far, far worse than a couple of late payments. 

 

Pay the loan off. If you don't have the funds - sell the vehicle. Or trade it.  Sell it to carmax. Carmax buys old vehicles too.  If you only have a year left you shouldn't be upside down at all. Don't let the lender repo the vehicle. Take control of your situation right now and do whatever you need to do to straighten it out.  

Established Contributor

Re: Behind on payments need advice


StartingOver10 wrote:

SillySally wrote:

Ok here's my story in a nutshell - I have a vehicle I'm behind two payments, have about 12 months left to the loan.   The car has major problems I would paid out loan and sell probably for less than I'm going to pay out on loan.   would a repossession hurt my credit more than the already two late payments I have now?   Appriciate any advice 


A repo on your CR kills your credit score. it stays on for 7 years - unless the lender gets a judgment in which case the judgment will affect you for 10 to 20 years + renewals if unpaid.

 

A repo is a huge deal.  As pointed out earlier, a repo is the beginning of your troubles. You would still owe for the loan + repo fees + late fees + attorney fees and any other fee that is allowed by your loan contract.  Just because you don't have the vehicle doesn't mean you don't owe the money. A repo and judgment are far, far worse than a couple of late payments. 

 

Pay the loan off. If you don't have the funds - sell the vehicle. Or trade it.  Sell it to carmax. Carmax buys old vehicles too.  If you only have a year left you shouldn't be upside down at all. Don't let the lender repo the vehicle. Take control of your situation right now and do whatever you need to do to straighten it out.  


^^^^^ this

 

Also, if your problems are something huge like engine or transmission, see if you can find a used one online and pay a shop to put it in.  I've seen folks with quotes for $3-$4k to rebuild a transmission find one at a junkyard for $700 and have it put in for $400-$500. 

 

Lastly, if you don't already have a mechanic you trust, find recommendations from friends/family and get one. Sometimes the quotes you get for repairs include everything it would take to get your car back to new condition including a lot of maintenance stuff you can get by without. If I took my 11 year old VW to the dealer for service, they'd tell me it needed $1500 in maintenance alone. I however know I've done the important stuff and the car is fine. You can explain the situation to a good independent mechanic and they can often help you narrow down the list to what absolutely needs done.

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Valued Contributor

Re: Behind on payments need advice

Call the lender and ask them for a hardship extension.

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