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What happens if my car loan gets charged off?

I’ve been struggling to make my car loan payments. My lender informed me if I miss any more payments, the vehicle could be repossessed and the remaining debt will be charged off. What happens if my car loan gets charged off?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear you’ve been struggling with your loan payments. If your
car loan
gets charged off, the original lender stops trying to collect payment. From there, the lender sells the debt to a collection agency.
Even if your loan is charged off, you still have to repay the debt by contacting the collection agency. the charge off will hurt your credit score since the debt has gone to collections. However, you might be able to avoid the situation by refinancing or contacting your lender to see if you can modify the loan before the loan is officially charged off.
Since you’re having difficulty making your loan payments, consider downloading the
Jerry
app to see if refinancing your car loan can save you hundreds of dollars per month.
MORE: Does refinancing a car hurt your credit score?
View full answer 
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