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What to Do If You Can’t Pay Your Installment Loans

Life is full of surprises. Sometimes the unexpected occurs, which makes it challenging to pay back an installment loan promptly. Whether that is a medical emergency or catastrophic car repairs, there are a couple of approaches you can take to minimize the negative impact on your credit score. So what can you do if you can’t pay your installment loans?

Talk with Your Lender

This notion seems obvious, but you would be surprised as to how many people neglect it. The single worst thing that someone can do is remaining tight-lipped and hoping that the problem goes away. It won’t go away. Talking with your lender can open up the possibility of more favorable terms.

Ask for More Time

If you know that you can make payments again shortly, you may want to ask for temporary payment relief. One way to do this is by having the lender roll the monthly payment into the next. That way, you pay double for the next month and make up for the previously missed totals.

People with more severe financial problems should consider a deferment. This approach allows for a temporary halt in payments until you can get back on your feet. Deferment is especially useful if you are going through a divorce or unemployment. Some lenders will not approve of deference, but many will, especially if it applies to student loan debt.

Consider Debt Consolidation

Debt consolidation allows borrowers to combine multiple debts into a single payment. The idea is to make repayments more manageable as it reorganizes various bills, interest rates, and due dates into one. People should consider debt consolidation if their credit is strong enough to qualify for a zero percent credit card and who do not want to run up debt again. Conversely, this method will not be the solution for you if you have overwhelming debt.

Writer

Vivaan Marsh is a professional writer, editor and an expert in personal finance. Her career as a professional writer stretch for over 11 years. One of her passions in life is to help everyday families with there financial problems, making their life a bit easier and explaining complicated topics in an easy way. Read more >

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