If your monthly budget is getting tighter and you can’t make your car payments, you might wonder, “Can you modify a car loan?” The answer is yes, but there are a few things to keep in mind. Not all lenders allow car loan modification, but many will. So if you are struggling to make your payments in Florissant, it’s well worth the time and effort to ask. Let’s go over the process of how to modify an auto loan.
Why Would You Want Auto Loan Modification?
Auto loan modification can take a long time, and it’s not always straightforward. But for many St. Charles drivers, it can be a huge relief. If you have a financial setback, it’s better to ask for an auto loan modification rather than a loan default. Here are some common scenarios:
- Unemployment: If you lose your job or have a change in income, this represents an unforeseen circumstance that might strengthen your case.
- Upside Down Loans: If you owe more on the car than it’s worth, you can do a modification instead of a refinance. This can help you get back on your feet.
- The Car Lost Value: If you’ve gotten into an accident that wasn’t your fault or your car lost value in some other way, consider an auto loan modification. You might not be approved, but your bank may try to help.
How to Modify an Auto Loan
Learning how to modify an auto loan is all about research and preparation, but also a lot of patience. Follow these steps to get started:
- Call Your Lender: While your lender may not grant you the modification, it’s best to be honest and forthright for the best chance possible. You can call the original lender or go through an attorney, but an attorney will require extra legal fees.
- Gather Documents: If your bank approves your auto loan modification, it’s time to build your case. Proof of hardship includes documentation like notarized letters or affidavits, bank statements, pay stubs, copies of bills, and other options that your lender will mention. You will also need to provide a hardship letter with the specific reasons for your request.
- Wait It Out: While waiting for your results, try to pay anything possible toward your monthly payments. This can help you avoid repossession. If your car is repossessed, your lender can’t do anything else.
- Assess Offers: Your lender might offer options like removing fees or lowering interesting rates. If you need more help, you can negotiate. If you’ve come to an agreement, congratulations!
Find Out More With Green Light Auto Credit
Want to learn more about your auto loan options in St. Louis? Contact us at Green Light Auto Credit for personalized recommendations.
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