For most of us earning our bread and butter out there, keeping track of the monthly expenditures is becoming more and more difficult. Rarely do we manage to save some money after all the bills have been paid and yet we still find that some money is owed. This is a cause of real concern for most.
The reason behind this is the worsening condition of the world economy. Inflation has become quite prevalent in the past decade or so and its effects are beginning to show. Most of the times, people find it almost impossible to pursue their dreams because of the economic conditions. Thus, it is imperative that you always have a contingency planned so that you don’t have to worry much about the payment.
So how to handle the car payments?
Let us discuss a few that might be helpful in dealing with car payment troubles and allow you to deal with the situation in a better way.
- First of all, it is understandable that you should have a serious look at your financial situation. Your main priority should be to analyze and cut down all the unnecessary expenditures that might be causing you a lot of trouble. Along the same lines, it is a good idea to explore new ways of generating income. Having a host of sources at your disposal, no matter what the scale, would accumulate to a significant value.
- Something that is very valued by the creditors is honesty and transparency. People often try to hide facts and present a different picture to the creditors in order to enhance their chances of getting a loan. But this is not true, and creditors appreciate that all the facts and figures are laid out in front of them so that the best possible solution can be achieved.
- There are some companies that allow you to make small deposits instead of paying back a lump sum amount. Often it might be difficult to come up with a large amount of cash. Breaking up your deposits in small portions might help to alleviate your problem.
- Experts advise that the payment date should be in accordance with the status of your bank account. When it is expected that the greatest amount of revenue generated would be available, then should you designate a time for paybacks.
- Financial planners and mentors can provide you with some expert insight which might prove to be quite helpful in setting up your budget. Always know your limits. Analyze the amount of income that you would be able to generate and then adjust your expenditures accordingly.
These days having a car is not a luxury but a necessity, but if you had to borrow it and you get into a situation of not being able to meet the payments, the insurance will most certainly end up seizing the good, and your credit report will be left Adversely affected.
But the good news is that the embargo is the last option, since there are other alternatives you can take.
• Change the car
The first option is to contact the dealer where you bought the car to see the possibility of changing it for a lower cost.
This is a good option as long as the balance of the debt is less than the value of the car. But considering that cars depreciate very fast, in many cases the balance of the debt is greater than the value of the car, and if so, you will have to pay the difference.
For example, if as a result of depreciation the value of the car is $ 15,000 and the outstanding debt is $ 18,000, you will have to pay $ 3,000.
• Modify the loan
The modification consists in contacting the lender to request changes in the terms of the loan as a reduction of the interest rate, extension of the term, and thus reduce the payment fees.
It is a process that can benefit you because it allows you to keep the car and reduce costs. At the same time the lender benefits because it will avoid the costs of repossessing the vehicle.
Through a refinance you can extend the term of the loan and access to lower payment fees. Another benefit is access to a lower interest rate, reducing the financial costs of debt.
Unlike the modification, refinancing replaces existing debt with a new debt.
• Sell the cart
You can put the car on sale and use the money to pay off the debt. If the value of the car is less than the balance of the debt, you can get a loan to pay the difference. For example, if you sell the car for $ 15,000 and the debt is $ 18,000, the difference of $ 3,000 can be settled through a personal loan.
If you plan to use your credit card you must be careful because if you withdraw cash the debt can become unpayable. Better contact the issuing bank and ask if they have offers to transfer balances and how much is the rate and the interest rate. Balance transfers are a very economical and easy way to access loans, as long as you do them correctly.
• Transfer the debt to a third person
Look for a person to take over the debt and keep the car.
The process is very simple. You just have to contact the lender to start the process which involves verifying that the person who is going to take over the debt is able to make the payments, so it will analyze your financial information and credit.
If everything is in accordance with your credit parameters, the lender will send the new owner a new loan agreement detailing the terms such as the interest rate, payment fees, and remaining term.
Avoiding falling into blackberry
To reduce the chances of falling behind, before buying a car, analyze your financial situation and make a budget for the expenses of the car that includes payment, maintenance, and insurance. Try not to spend more than 18% of your monthly income on total expenses for the car.
If after buying the car your financial situation changes and the car’s expenses exceed the limit, it would be good to consider changing it to a cheaper one that you can pay in a term no longer than 36 months.
Even after all your planning and caution, there will be times when you find yourself in some financial trouble. This is where the role of the company, that you are associated with, comes into play. There are many good companies out there who are willing to stick with you and help you in finding the best possible route to a solution.
An example of a good company that is working in the aforementioned framework is www.WholeSaleCars.com. The objective of the company is to facilitate the people in terms of car payment troubles. They try their best to accommodate all the applications and enable the buyers to have a warranty on their cars.
So now we know how important it is to plan your budget and to find a good company that would be willing to stick with you in times of trouble.