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30 Day Cycle

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Anonymous
Not applicable

30 Day Cycle

Ok! I need some assistance from someone who truly understands the following.

 

My situation is this; I am battling with a my car loan company in regards to a 30 day late payment during my cycle. My payments are due the 15th of every month; now I my payment posted for January posted on the 14th of Feb. They are saying that the payment was late 30 days late; however I disagree because the payment posted prior to the next payment due date which would be the begging of the new payment cycle. Their explanation for this is that; because January carried 31 days they incrementally counted from the 15th of January to the 14th of Feb. Thus my payment was considered 30 days delinquent; how could this be; when the "30" cycle state on my contract is the given date that I make my payment every month?

 

In addition, I realized that the month day marked late is inaccurate as it would be impossible for Feb to be late based on the fact that would be January that would be late and not Feb. As the Feb, payment was made a few days after the due date.

 

 

Please help!

Message 1 of 16
15 REPLIES 15
Lel
Moderator Emeritus

Re: 30 Day Cycle

I can't follow your logic regarding the 30 day cycle.  It sounds like your car loan is set up that your monthly payments are due on the 15th of every month, regardless of how many days elapse between actual due dates.  I think this is pretty standard for car loans - for the 3 car loans I have had in the last 16 years, my due date has always been a specific day of the month.

 

Think about how confusing it would be if your loan payments were due on strict 30 day cycle.  Your due date would change almost every other month, and would get progressively earlier in the month.  Let's say your first payment was due on January 15.  Thirty days later is February 14.  Thirty days after that is March 16 (during non-leap years).  Then it it would be April 15, May 15, June 14, July 14, August 13, September 12, October 12, November 11, and December 11.  At the beginning of next year, your January payment would be due on January 10.  Each year, your due dates would continue to get earlier and earlier in the month.  That's what happens when you try to divide 365 (or 366) by 30.

 

Your January payment was due on January 15.  If you paid on January 16, you would have been 1 day late.  On January 31, it would have been 16 days late.  On February 14, unfortunately, your payment was exactly 30 days late.

Message 2 of 16
Anonymous
Not applicable

Re: 30 Day Cycle

It seems that you do follow what I am saying based on your second paragraph. What i am saying is this; how can they incrementally count each individual day and state that the payment is 30 days late based on a technicality that Jan carried 31 days. If that be the case then why even have a due date in the first place and not do what you outlined; which is what i stated to them during a lengthy phone call. If a company is going to incrementally count each day then why not do it continuously for every month and yes; why not have the payment due date change. It is a technicality and I do not see the logic; additional they even reported the incorrect month as being late. Which shows a break down in their process and procedure; I want a resolution to the matter as I have had a great payment history with them prior to that instance. And I of course took a hit to my credit because of this.


What I am looking for is a leg to stand on and a reasonable legal argument to the matter; my contract states I will be billed via a 30 day cycle; if that be true then would they not have contradicted their own contract by assigning a specific payment date.

Message 3 of 16
llecs
Moderator Emeritus

Re: 30 Day Cycle

Is there no fixed due date mentioned in your contract? Nonetheless, if fixed, and the due date listed was January 15 or even if it was variable and the due date was also the 15th, then payment is still due on that day. The day clock that determines reporting starts counting the day you first were late, namely the 16th of January. Thirty days later is the 14th. So, when the payment posted the following day, you were 31 days late and therefore they reported a 30 day late.

 

And I understand your point too. But what the contract says and how something reports are two different things. They are unrelated.

 

What you can do to get the late removed is to send them a GW letter. Kindly ask them to remove the late based on a lost bill, financial situation, life event, etc. You might find a sympathetic ear who would remove the late. Make sure you have a good 3-4 months on on-time payments (before the due date) first.

 

BTW, be careful about being late. I've only purchased 2 cars, but in both contracts, I was considered in default if I was even 10 days late and at which point, they could repossess the car. In fact, in my not-so-wise credit days, I had a car repossessed and I was only 30 days late.

 

 

Message 4 of 16
marty56
Super Contributor

Re: 30 Day Cycle

IMHO most companies would view the account as 30 days late if you didn't make the payment by the next statement drop date.  The best way to look at late payments is to view them as statements late rather than days late.  Also be aware that paying less than the required amount and then paying the rest late would produce the same effect as  paying the full amount as late.  That is the situation which created my 120 day late.

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 5 of 16
llecs
Moderator Emeritus

Re: 30 Day Cycle


@marty56 wrote:

IMHO most companies would view the account as 30 days late if you didn't make the payment by the next statement drop date.  The best way to look at late payments is to view them as statements late rather than days late.  Also be aware that paying less than the required amount and then paying the rest late would produce the same effect as  paying the full amount as late.  That is the situation which created my 120 day late.


+1 .... including deferred payments.

Message 6 of 16
Anonymous
Not applicable

Re: 30 Day Cycle

Well that is exactly what I am saying the payment was submitted on the 28th day ad posted on the 30th day, therefore 24 hrs had not passed and that would have made he payment 29 days late. The payment showed as posted on the 30th day no the 31st day.

Message 7 of 16
RobertEG
Legendary Contributor

Re: 30 Day Cycle

The 30-day billiing cycle and the reporting of 30-days lates to your CR are apples and oranges. Both are"lates," but both are not necessarily reportable "lates."

Something, be it your contract with the OC, or monthly billing statements issued by them, must set a legal due date before you can become delinquent on payment.

If your payment is received after that due date, it is a late.  But it is NOT reportable to a CRA as a credit reporting derog until it goes 30 or more days beyond the due date, which is 60-days from the billing date.

The CRA reporting manual specifically says the "clock" for a 30-day derog reportable to a CRA starts 30-days after the due date, and NOT the billing date.

So, it is a simple matter of knowing when the payment was due.  If payment is not received within 29 days of that date, it become a reportable 30-day late.

 

 

 

Message 8 of 16
Anonymous
Not applicable

Re: 30 Day Cycle

 So if the payment is due the 15th and it is was paid on the 27th day after that due date; then shown as received on the 30th day which was one day before the next due date i.e. the 14th of the following month. Would that be considered 30 days late then?

Message 9 of 16
RobertEG
Legendary Contributor

Re: 30 Day Cycle

If your account sets a  due date for payment of  the 15th of month A, and is paid before the 15th of month B rolls around, it is late as far as your dealings with the OC are concerned.  But the OC cant report it as a "30-day late" to your CR until more than 29 days have expired from the due date set on the 15th of month A.

If they did not post payment to your account within 29-days of the due date, then reporting of a 30-day late to the CRA is appropriate.  It doesnt matter, under most account agreements, when you remit funds.  It is when they post payment to your account.

If they posted payment to your account within 29 days of the due date, no CRA posting.  It they posted 30 or more days later, it is a legit derog that can be reported to the CRA.

Message 10 of 16
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