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What will happen if you don't pay your car loan?
I didn’t pay my car loan last month and I’m just wondering what happens now? I’m hoping I can start paying normally again next month, but I’m not positive that I’ll be on top of my expenses by then. I’m really worried that my car will be repossessed.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear you’re struggling right now, but try not to worry too much! Most lenders won’t report late payments for 30 days, so you have some time to fix the problem. If your lender does report a late payment, you will see a drop in your credit score that will stay on your credit for seven years.
If you continue to miss payments, your lender will eventually repossess your car. Try not to panic, though! There are also a few things that you can do to avoid repossession:
- Talk to your lender. Some lenders have relief programs for borrowers struggling to make payments. The earlier you talk to your lender, the more they will be able (and willing) to help you.
- Refinance. If your loan has a high interest rate that’s making payments difficult, this could be a good option. You can refinance for a longer repayment period to spread out the payments a little more, or if your credit score is good, you can try to find a lower interest rate elsewhere. Try to do this before you miss a payment so that your credit score is still in top shape.
- Sell your car. If you don’t need your car right now, you can sell your car and use the profits to pay off your loan.
- Trade-in your car. Alternatively, you can trade in the car for a less expensive vehicle, which will help lower your monthly payments.
If you decide to refinance your loan, check out the
Jerry
app! Just download the app to see options from multiple lenders without taking the time out of your schedule to seek them out individually. That way, you can compare rates and choose the loan with the terms that work best for you.MORE: Does refinancing a car hurt your credit score?
View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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