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Can you take a car loan payment holiday

Can you take a car loan payment holiday

Another of the many questions the guys here at Car Nation Canada have answered over the past week is around car loans and payment holidays. I think it’s another prime candidate for a post letting everyone know what they can and cannot do with their car loan.

With mortgages offering payment holidays and student loans being put on hold for the duration, what’s happening with car loans?

Car loans and COVID-19

At the time of writing, there have been no official changes for car loans as far as the government or legislation goes. The government has said they expect companies to support customers as much as possible throughout this time but have stopped short of mandating it.

However, individual lenders are more open to the idea of payment holidays than ever before.

There has been no official guidance and no proposed changes to private loans or the market as a whole yet. But individual lenders are beginning to offer the opportunity to take a payment holiday. Some manufacturers who operate their own car loans are also considering allowing payment holidays.

Payment holidays are not the only option. Ford for example has a range of options for people having trouble making payments. Their options include reduced payments, payment extensions, payment holidays and pre-arrears forbearance. All viable options in different situations. All designed to help you keep your car, maintain your credit score and service the loan.

Other manufacturers and lenders may offer similar options. It is well worth checking if you are expecting trouble or are having trouble making payments right now.

You are not a loan

Lenders aren’t always the faceless corporations where everyone is a line on a spreadsheet. They are run by people for other people and can be surprisingly helpful.

Our advice would be to speak to your lender before you begin having trouble making payments. This time more than ever, we are all seeing changes to our lives and no lender can fail to appreciate just what you’re going through.

Explain your situation. Explain why you cannot make payments. Explain that you fully intend to service the loan as originally agreed. Explain that while the world is in turmoil and employers are having to make tough decisions, you may need a little help meeting your obligations.

Most lenders would rather be helpful and flexible than lose money on a forfeited loan. The public expects lenders to be more helpful and work with borrowers than against them. There is no guarantee but if you don’t ask, you certainly don’t get. Just make sure to ask before you miss a payment to get the best out of your lender!

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