If you’re struggling to pay your car loan or think you might struggle in the future, extending the loan can be a viable option if your lender agrees to it. Extending may not be your only option though.
A car loan is typically set up as a fixed payment on a fixed day of the month for a fixed period of time. For many, it’s a predictable outgoing that is one of the more manageable financial obligations we have in life.
That isn’t always the case.
Extending a Car Loan
If you foresee a situation where you might struggle to make payments, or know something is on the horizon that is going to make life difficult, the time to take action is now.
Extending a car loan is just one of the options you can take but it is a viable one, depending on your lender.
Lenders aren’t obliged to extend loans and some don’t. Many lenders are flexible and are willing to work with you to ensure you can comfortably pay off the loan.
The key to extending a car loan is to discuss it with your lender as soon as possible. Definitely before you miss a payment or get into trouble!
Lenders are much more willing to work with you if you talk to them before missing a payment or falling behind.
If you need financial help, you can also:
Take a payment holiday: Some lenders will allow you to take payment holidays to help you through a situation. The length of the holiday varies between lenders but it can be from 1 month up to 6 months. You will still be charged interest over that time.
Refinance the loan: If you have paid off a portion of the loan, you could pay off your current car loan with a new, cheaper one. Depending on how much you have paid off, this could be the difference between managing and not. Click here to learn more about refinancing a car loan.
Sell the car: If you have another car you can use or have scope to downgrade, you could sell your current car. You can either use all the money to pay off the car loan or use what’s left over from settling the loan to buy a cheaper car.
Transfer the loan: If all else fails, you could transfer your loan to someone else as long as they agree and would qualify for the loan. They would need sufficient credit score, loan to income ratio and income to qualify though. To learn more about how to transfer a car loan, click here.
You can extend your car loan but it isn’t your only option. If your lender agrees, it could be the easiest way to manage things. If they don’t, you have other options as we outlined above.
Whatever the situation you find yourself in, act before the worst happens and your lender will be much more flexible!
Thank you for reading! We hope his helps you figure out your car loan situation. If you have any more questions about extending your car loan, contact us here!