A personal loan can be very valuable to you, but it can be a major problem if you get behind on those payments. Taking action as soon as you know you are behind is very important. The first thing to do is to really assess your budget. Is it possible you can get money out of your next paycheck to cover it and get caught up? Is it an option to work extra hours to have more money for that paycheck if your budget is already tight?
Assess what you can do, but don’t get into the process of borrowing more to pay what you already owe. This robbing Peter to pay Paul will be a downward spiral and it will cause you plenty of stress. You don’t want to lose sleep over not being able to pay your personal loan payments.
Contact your lender as soon as you can to let them know what the situation is. Don’t hide out from them or make them call you. Instead, be responsible and let them know as soon as you can what is going on. Then see what options they have for you. If you can make the payment on your next pay date, let them know it. They can extend your due date in many instances so that it won’t show up as late.
Is it possible you can make a half payment now and then another half with your next payment? This could be an easier way for you to get back on track with your personal loan payments. If that isn’t something you can do, ask the lender about making an interest only payment. All you have to pay is what you owe in interest for that payment and no principle. They will tack that additional payment on at the end of your loan term.
If you aren’t able to pay due to a reduction in hours or the loss of your job, be honest with the lender about that. They may be able to refinance your personal loan so that you have lower payments. For example if your loan right now is $218 and you owe 12 more months on it, they may be able to offer you a payment of $125 a month and you pay it for 24 months instead.
You will pay more this way, but it can give you some relief until your hours pick up or you get another job. Doing what you can to keep the payments in good standing is very important. You don’t want to risk your credit being harmed to the point where it is going to be extremely difficult for you to get a personal loan in the future.
You may be able to negotiate too once you get some additional money coming in. For example, if you get a tax refund you can ask the lender to settle the account. They may do so for less than you owe if you pay them a lump sum. For example, you may owe $2,850 with the principle and interest. Yet they will be willing to take a payment of $2,000 if you pay it all at once.