4315 North Service Road, Burlington, ON, L7L 4X7
My Garage

Can you extend a car loan?

Can you extend a car loan?

If times are tight and you’re having trouble managing all your payments, you’re not alone. You’re also likely not out of options. Car loans can make up a significant portion of our outgoings so it’s an area of personal finance we should address if possible.

With that in mind, is it possible to extend a car loan if you’re struggling to make payment?

Yes, it is.

Extending a car loan

Extending your car loan is not your only option to manage difficult times but it is certainly an option.

The longer the term of your car loan, the lower the monthly payments will be. If times are tight, this could be enough to get you out of a sticky situation. However, the overall cost of the loan over the term will be more expensive.

As interest is calculated over the term of the loan, the longer that term, the more interest you’ll pay.

If extending a car loan is your only option, lowering your monthly payments so you don’t miss any is definitely a better option than missing a payment!

Car loan extension options

If a car loan extension is something you want to do, you have three main options.

You can:

Defer a payment – Most lenders will have a deferment policy where you can take a payment holiday for a set amount of time. You will still pay interest on those missed payments but it will be added over the term.

Extend the car loan term – Some lenders will work with you to extend the loan so you can maintain payments. It’s in their interest to keep you as a customer and work with you so you can manage.

Refinance the loan – Your final option is to refinance. Depending on how much of the loan you have paid off, you could lower the overall amount and your monthly payment by refinancing. As long as your credit score is good, this could also be an option.

The key to changing any of the terms of a car loan is to discuss it with your lender before you get into trouble. Lenders are far more likely to be flexible if you work with them ahead of time to avoid issues than if you contact them when it’s too late and you have missed payments.

If you need help with any of that, contact one of our team and we can help.

 

Lets get in touch!

Categories: Uncategorised, Resource

Tags: , ,