Can You Ask to Skip a Car Loan Payment?
Considering deferring a car loan payment? Learn the proper approach to your lender and the financial implications for your agreement.
When facing unexpected financial challenges, managing regular expenses like car loan payments can become difficult. While timely payments are expected, you can explore options with your lender, such as requesting to skip a car loan payment. This is not an automatic right, but depends on your loan provider’s policies and your individual loan agreement. Lenders sometimes offer programs to assist borrowers experiencing temporary financial hardship.
Understanding Payment Deferral
“Skipping a car payment” typically refers to a payment deferral, which allows a borrower to postpone one or more scheduled payments to a later date. This means the payment is not eliminated, but moved within the repayment schedule. Lenders often provide this option to help borrowers avoid defaulting on their loans when facing short-term financial difficulties, such as an unexpected medical bill or job loss. This offers temporary breathing room during financial strain. The decision to grant a deferral is made by the lender, making it a mutual agreement rather than a unilateral choice by the borrower.
Preparing Your Request
Before contacting your lender, gather relevant information about your car loan. This includes your account number, current balance, and payment history. Understanding your loan agreement’s original terms, especially any clauses related to deferrals or hardship options, will be beneficial. Some lenders may have “skip a payment” provisions outlined in their contract or accessible through online portals.
Prepare a clear explanation of your financial situation and the reason for your request. Detail the specific hardship you are experiencing, such as a temporary reduction in income or an unexpected expense. Be ready to propose a realistic timeline for when you anticipate resuming regular payments. Lenders may request supporting documentation, such as pay stubs or other financial paperwork, to verify your situation.
Submitting Your Request
Once you have prepared your information, contact your lender. Many lenders offer multiple channels for submitting a deferral request, including dedicated phone lines, online customer portals, or integrated “skip payment” options on their website.
When communicating, clearly state you are seeking a payment deferral due to financial hardship. Be prepared to articulate the details of your situation and the information you prepared. Lenders may require a formal hardship letter outlining your circumstances, loan identification number, and when you expect to resume payments. Prompt communication before a payment is missed can provide more options and demonstrate a proactive approach to managing your loan.
Loan Agreement Modifications After Approval
If your payment deferral request is approved, the loan agreement will be modified. A common adjustment is adding the skipped payment to the end of the loan term, extending the loan by one month for each deferred payment. In some cases, the deferred amount might be due as a lump sum at the end of the loan, or lenders might allow reduced payments of only interest for a period.
Interest typically continues to accrue on the outstanding loan balance during deferral. While you gain immediate payment relief, the total interest paid over the loan’s life may increase. Lenders usually issue a forbearance agreement or modified payment schedule for you to sign, formalizing new terms and indicating when regular payments resume. Approved deferrals generally do not negatively impact your credit score, as the payment is considered “paid according to agreement” rather than missed.