Consequences of a Late Payment on a Bad Credit Auto Loan Part II

It is stated that during a normal loan term (even in case of a bad credit auto loan), the borrower faces some thoughts regarding what would happen if he/she delays the payment of the next installment. Well, the wide popularity of some consequences ensures that most of the people make their payments on time. However, the following lines provide information regarding what would happen in case of late payments:

The least dire consequences include warnings or late fees. This means that the lender might forgive if it is done once or might charge some fine because of the late payment.
In case the borrower is becoming delinquent time and again, then some lenders have the right to increase the interest rate charged on the loan. The amount of increase can vary according to the lender but it could still cost almost thousands of dollars on an average loan.

The biggest issue of overshooting the date of the payment is that the lender complaint might result in reduction of credit score. This means that docking of even a few points can result in charging of higher rate on other loans, reduction in the credit line of the credit cards or calling the note due by the current lender. Credit scores are considered in many transactions these days which makes it crucial to ensure that they are not depleted at any rate.

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