If you are behind on loan payments, you may not be able to:
-
Get a new loan: Lenders will typically check your credit score and
payment history before approving a new loan. If you are behind on loan
payments, it will be difficult to qualify for a new loan. -
Refinance your existing loan: Refinancing a loan can help you get a
lower interest rate or monthly payment. However, most lenders will require
that you be up to date on your payments before refinancing. -
Get a forbearance or loan modification: A forbearance allows you to
temporarily pause or reduce your loan payments. A loan modification is a
permanent change to your loan terms, such as a lower interest rate or longer
repayment period. Both forbearance and loan modifications are typically only
available to borrowers who are in financial hardship.
In addition to these specific options, you may also find it difficult
to:
-
Rent an apartment: Many landlords will check your credit score and
payment history before renting to you. If you are behind on loan payments,
it may be difficult to rent an apartment. -
Get a job: Some employers will check your credit score and payment
history as part of the hiring process. If you are behind on loan payments,
it may be difficult to get a job.
It is important to note that every lender and situation is different. It is
always best to contact your lender directly to discuss your options if you are
behind on loan payments.
Here are some steps you can take to protect yourself if you are behind on
loan payments:
-
Contact your lender as soon as possible: Lenders are more likely to
work with you if you contact them early. -
Explain your situation and why you are behind on payments: Be honest
and upfront with your lender. -
Ask about your options: Lenders may be willing to offer you a
forbearance, loan modification, or other assistance. -
Make a payment plan: If you are unable to pay your full monthly
payment, work with your lender to create a payment plan that you can afford. -
Stick to your payment plan: It is important to stick to your payment
plan once you have agreed to it. This will show your lender that you are
serious about paying off your loan.
If you are struggling to make your loan payments, there are resources available
to help you. You can contact a credit counseling agency or the National
Foundation for Credit Counseling for free advice and assistance.
