Buying a car is what most of us dreamed of. Having that set of wheels will give you the convenience to travel anytime, anywhere. But let’s face it, you need to have a lot of money to invest in it. Of course, you have the option to pay in cash or a loan, but if it means you’re putting all your bank savings into this purchase, you might want to rethink it.
Many banks offer car financing so you can have it without having to pay in full right away. However, this must come with the discipline and responsibility to care over your loan payments. Otherwise, your car will end up repossessed.
As bad as it may sound, repossession can deprive you of convenient transportation and ruin your credit standing. To avoid it, here are some simple tips you can follow.
A contract is an essential document of a car loan. It not only protects both parties mainly when conflict arises, but this is also where the complete details of the loan are stated, including payment terms, interest rates, and fees. So before signing the contract, make sure you read and understand all the terms and conditions. This way, everyone knows what will be expected from both parties.
If you’re dealing with Security Bank repossessed cars, you can read it on their page.
Know that under car refinancing, the bank or the lending company is the car owner, and the ownership will be transferred to you after the full payment of your loan. The moment you miss at least one payment, the bank can demand the full remaining loan outstanding balance, and your car is at risk of repossession.
So be aware of what you owe, your monthly loan installments, and the total loan cost. Then, create your monthly budget, allot your money correctly and stay on top of your other obligations. It isn’t a movie that having no idea of what will happen is a better experience.
Check how much you can borrow with our Auto Loan Calculator:
Understandably, you have other bills to pay. You’re a busy person and may unintentionally forget to go to the bank and pay your car loan.
We got a solution for you. Enroll your bank account into an Auto-Debit Arrangement and make scheduled or recurring payments on your own. This will avoid any late payments and charges that might cause trouble in the future. It would help if you also let go of your unutilized monthly subscriptions and make your car loan your most important bill.
You and your lender must have open communication. If you feel like your finances get tighter, go over and talk to your bank in advance. Be honest and explain your situation before it’s too late. Make any temporary arrangements if possible. They might be willing to work on it rather than repossessing your car, which will also cost them. Who knows how having that conversation can save you?
Showing transparency and being proactive might give you higher chances of preventing vehicle repossession from happening.
If unexpected money comes like a salary raise or bonus, or excess in your budget, you can reduce your loan. Make advance payments. It will save you from payment penalties and even finish your car monthly payments sooner.
Nevertheless, in case you missed a payment, don’t panic. It might not be late to make up for it before repossession. Go over to that contract and check if there’s an installment postponement policy. It could help you take a break and buy some time. Check the clauses related to missed payments and late payment penalties.
Whether you have the postponement policy or not, you may be facing payment charges. Make up all the late payments and assure that this won’t happen again, as this will put your car at risk of repossession.
By the end of the day, no one wants to see their car taken away as this might be as sad as someone close to you leaving. The experience is heartbreaking and will affect your credit standing so before it happens, make sure you understand how to avoid car repossession–be a responsible borrowers and strictly do our payment obligations. Not too long, the full ownership of the car will be transfer to you.