Millions can’t pay their car loans. Here’s what to do if you’re one of them

If you’re at risk of having your car or truck repossessed, there are other options available besides deferment, but none quite as simple or easy. You could do what’s called a “voluntary repossession,” where you contact your lender and indicate your desire to turn your vehicle over to it. Your credit will take a hit and you’ll be liable for any outstanding debt the bank fails to recoup at auction, but the overall impact to both your credit score and pocketbook will be less than if you wait for the bank to forcibly repo your car.

However, as most US cities are far along in the process of reopening and orders shuttering nonessential businesses have mostly been lifted, you can probably bet that repo companies will be up and running as soon as they can be.

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In most states, a lender, like your bank, can start the repossession process the day after you miss even just one payment, but most companies give their customers a grace period. Often the lender won’t even charge a late fee until the payment is at least 10 days late, and most won’t report it to the three major credit bureaus until it’s over 30 days late. 

Chances are if you’re worried about making your car payment, you have other bills keeping you up at night, too. Here’s what you need to know about rent relief during the pandemic, as well as what assistance is available if you have a mortgage. For taxes, credit cards and everything else, here’s what other financial help is available.

The filing indicated the company has $1.4 billion of cash on hand, though revenue plunged 67% in the second quarter. If there’s a smidge of a silver lining, Hertz did say demand has slowly started to recover each month, but it’s nowhere near pre-COVID-19 levels. Still, the firm plans to offload another 182,000 cars in its rental fleet. According to the report, Hertz already sold off 100,000 cars as it reached a deal to forgo lease payments on the vehicles’ master lease to save money amid bankruptcy.

According to a Bloomberg report on Tuesday, Hertz filed for debtor-in-possession financing, indicating choppy waters ahead. DIP financing comes from creditors who believe a company has a solid recovery plan virtualinternetandbusinessonline.blogspot.com post to a company blog execute as it works to restructure. But as a rental car companies are reliant on travelers, the industry’s likely in for a gloomy outlook considering the coronavirus pandemic continues unchecked in numerous parts of the world. 

Defer payments: Federal student loans are deferred until September and you may be able to temporarily stop paying rent or your mortgage. The Department of Housing and Urban Development suspended evictions and foreclosures through June 30, later extended to Aug. 31, but not all properties qualify. Contact your lenders to learn about your options for delaying payments without penalty.

And don’t just stop paying your loan and hope for the best. Whether or not lawmakers decide the repo industry performs an “essential” function, or if the repo man has to wait for a treatment or vaccine like the rest of us before getting back to work, eventually your delinquency will catch up with you. With banks demonstrating some compassion right now for those who’ve suffered financial hardship, you might as well take advantage of one of their relief programs while you can. 

What are the interest rates for a coronavirus hardship loan? If you have excellent credit, you may be eligible for a loan with an interest rate as low as 3%. A lower credit score means your loan may come with a higher interest rate.

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For the most up-to-date news and information about the coronavirus pandemic, visit the WHO website.

The Hertz bankruptcy ordeal continues, and while the rental car company continues to offload used cars at some dirt-cheap prices, it still needs other sources of cash in the meantime.

If you’ve skipped a car payment or two recently — or you worry you might have to miss an upcoming one — you’re not alone. Due to the coronavirus recession and record levels of unemployment, over 7% of all car loans in the US are currently in some sort of deferment program, according to recent data released by credit reporting agency TransUnion.

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If you’ve fallen behind (or you think you’re going to fall behind) on your car payment for 90 days or longer, you may very well be at risk of having your car repossessed. Your lender may be more lenient if you’ve never missed a payment before, but the more often you’ve been late in the past, the sooner they might attempt repossession.