What to do if you're struggling with your car finance repayments
9 June 2023
By Joy Pearson
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If you're struggling to keep up with your car finance repayments, you're not alone. With rising living costs and the uncertainty of the current economic climate many people are finding it challenging to make ends meet. However, there are steps you can take to manage your car finance debt and avoid defaulting on your repayments. In today's post, we'll explore some of the options available to you and provide some opinions on what to do if you're struggling with your repayments.
The first step you should take is to contact your lender and explain your situation. Many lenders are willing to work with borrowers who are struggling to make their payments. They may be able to offer you a payment plan, reduce your interest rate, or temporarily suspend the payments until you get back on your feet. However, it's essential to contact your lender as soons as possible to avoid defaulting on your payments. Contacting your lender is the best course of action. Ignoring the problem will only make it worse, and defaulting on your payments can have severe consequences, such as damaging your credit score and potentially losing your car.
If you have a high interest rate on your car finance, refinancing could be a viable option. Refinancing your car means taking out a new loan with a lower interest rate to pay off your existing loan. This can reduce your monthly payments, making them more manageable. However, it's important to be aware that refinancing can extend the term of your loan, which means you'll be paying more interest in the long run.
If you're struggling to make your car finance repayments, it's essential to take action as soon as possible. Contacting your lender, or refinancing your car are both viable options. But, you must consider the pros and cons of each options and choose the one that is best suited for your financial situation. Remember, there is no shame is asking for help, and there are resources available to support you in managing your car finance debt.