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What to do if you can’t afford your car repayments due to the pandemic
Reach out to your lender directly to discuss alternate payment options.
Lenders are facing the financial crisis caused by the coronavirus head on. There are multiple options, including payment deferment, that can help when your budget is tight.
What should I do if I can’t pay my car loan because of the coronavirus?
If you’re unable to make your normal car payments, consider these four options:
- Reach out to your lender. Your lender may offer a deferment or forbearance program if you’re facing financial difficulty. Even if this isn’t a normal option, many lenders are willing to work with customers affected by the coronavirus outbreak on a case-by-case basis.
- Apply for public assistance. It won’t lower your car payment, but it can make your other bills easier to handle. Our guide on handling your finances during the coronavirus outbreak has details about what programs are available.
- Refinance your loan. If you still have a steady source of income, you may want to check out your refinancing options. While it may cost more over the long run, you can also extend your loan term to lower your monthly repayment. You may also be able to lower your interest rate, which could help keep the amount you pay the same.
- Consider a downgrade. Selling or trading in your car won’t necessarily be easy, but it can help reduce the amount you pay each month. You can shop for a car online and get in touch with dealerships to see if they’re willing to give you a quote on your current vehicle — and set up a test drive that maintains social-distancing rules.
Should I defer my car loan payment?
Many of the lenders and manufacturers below offer up to three months of deferred payments on their loans — but this may not be the right choice. When you defer a payment, interest will continue to accrue and be added to your loan. Your loan term is also extended, which gives even more time for interest to add up.
Overall, deferring a payment should be a last-resort option to avoid overpaying on your loan. Instead, you might want to carefully look at your budget and exhaust your other options before signing up for deferment.
Which lenders are offering repayment assistance?
|Lender||Assistance options||Customer service|
|Ameris Bank||No deferment fees for postponing payments due to financial hardship caused by the coronavirus|
|Bank of America||Payment deferral available on a case-by-case basis|
|Capital One||Contact Capital One to discuss alternate payment options|
|CarMax||Contact CarMax to discuss alternate payment options|
|Digital Federal Credit Union||Assistance plans available on a case-by-case basis|
|Fifth Third Bank||Contact Fifth Third Bank to discuss alternate payment options|
|KeyBank||Defer auto loan payments for up to three months with no late fees|
|LightStream||Payment deferral available on a case-by-case basis|
|LendingClub||Payment deferral available on a case-by-case basis|
|Navy Federal Credit Union||Payment deferral available on a case-by-case basis|
|PenFed Credit Union||Skip one payment during the coronavirus national emergency|
|PNC Bank||Contact PNC to discuss alternate payment options|
|Regions Bank||Contact Regions for payment assistance options|
|Truist||Payment deferral available for auto loans originated by BB&T or SunTrust|
|USAA||Payment extension up to 60 days|
|U.S. Bank||Loan extensions may be available for borrowers affected by the coronavirus|
|Umpqua Bank||Financial assistance may be available for borrowers affected by the coronavirus|
Which manufacturers are offering repayment assistance?
These major manufacturers have assistance available for those affected by the coronavirus.
|Manufacturer||Assistance options||Customer service|
|Mercedes-Benz||Payment deferral requests available|
|Nissan||Payment deferral requests available|
|Toyota||Payment relief available on a case-by-case basis|
|Volkswagen||Payment deferral and lease-end extensions available on a case-by-case basis|
What if my car loan provider doesn’t have a COVID-19 relief plan?
Even if your lender doesn’t have specific options in place for those affected by the coronavirus, it may still have options for those who are experiencing financial difficulty. Contact customer service by phone or email to discuss your options and determine the best plan for your situation.
Compare car loan refinancing options
While deferring a payment and refinancing your loan may be good options when money is tight, you’ll want to take a holistic look at your budget first. Find places to cut, and don’t be afraid to contact your lender to discuss its full program so you can make a well-informed decision about your next steps during the COVID-19 outbreak.
Stay informed on the latest updates by bookmarking our coronavirus news hub.
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