Auto Loan Modification Measures

You took an auto loan anticipating a continued income level but things have suddenly changed. The recent retrenchment in your firm after the global financial crisis hit you hard. You now have no monthly income or the new job you have secured pays lower than the former or the new business you set up after being laid off is picking up slowly and so the profits cannot sustain the installments.

Well, most people who apply for auto loans deem their repayment on current income and capacity which at times never turns out the way they had envisioned. This is a time for you to think about a savior and it turns out to be a loan modification option. The modification is a change that lenders will be prepared to set up in your loan contract to make your loan more affordable as concerns your current financial standing.

The measures might be short term or long term depending on how you agree with them based on your immediate future income prospects. Some of these measures might take the form of freezing your installments for a number of months, although this is not common to all lenders. If given, this will attract certain penalties and carrying forward of the interest that were to be paid in that frozen period and so it is important to check with them first. Another measure could be reduction of repayments for the loan to suit your new income level. This is the most common measure to would have been auto loan defaulters used by many lenders.

Imagine you are a dealer and your client defaults on an auto loan deal you struck out with him! It is one thing all dealers offering such products dread most because of the risks of loss of both investment and clients and the fact that they will have to start thinking of repossessing that car from their loyal customers when it has already become part and parcel of their lives leave alone the costs involved in such legal processes.

 

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