If you are like most people, having a reliable form of transportation is as crucial as shelter and food. You need your car to get to school or work or both. Without a vehicle, it would be hard for you to make a living and get around. When you get in trouble with your auto loan, you may fear losing your car.
Fortunately, you have options if you start falling behind on your car payments. Here are some tips for getting back on track and avoiding involuntary repossession.
Talk to your lender ASAP
If you are suddenly having difficulties keeping up with your car loan, you should reach out to your lender immediately. According to Auto Trader, most lenders want to work things out with people who are falling behind on car payments. As soon as you fall behind on a payment, take action.
The sooner you communicate with your lender, the better. Earlier contact means you will have more options to come to a solution. You may be able to negotiate your interest rate, extend the duration of your loan with a lower monthly payment or request a deferral. Your lender wants to keep your business, even if you struggle temporarily.
Trade in, sell or file for bankruptcy
If your financial troubles seem like they are going to be a long-term problem, you may have to consider taking a bolder action. For example, you may be able to trade your vehicle in for something cheaper. Another option is to sell your car to get out of a hefty loan. However, if you want to keep your, you can declare bankruptcy. Bankruptcy is not as scary or damaging as it may sound. It can help you keep your car and reorganize the payments so they are manageable. You may also be able to have your debts discharged.
There are resolutions if you fall behind on your payments–do not think that repossession is necessary.