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What happens if you don't pay a car loan?
Would anything bad happen if I didn’t pay my car loan on time? I might have to skip a payment this month, but I should be able to get back on schedule next month. Will that hurt me or will I be okay?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Try not to worry if you’re going to miss one payment on your car loan! When you miss a payment, you’ll see a drop in your credit score that will stay on your credit for seven years, but your car usually won’t be repossessed until you miss multiple payments.
If you already know you’ll need to miss a payment, talk to your lender. Some lenders have relief programs for borrowers struggling to make payments. You may even be able to pause payments for a month or two to get back on top of your finances. The earlier you talk to your lender, the more they will be able (and willing) to help you, so try to do this as soon as possible.
Additionally, many lenders don’t report late payments to major credit bureaus until they’re late by more than 30 days. If you’ve spoken to your lender and arranged a new payment date within that time frame, you’ll likely avoid a hit to your credit score.
If you’re worried that this could happen again in the future, consider
refinancing your loan
to lower your monthly payment.An easy way to explore your refinancing options is with the
Jerry
app. Download Jerry to see if refinancing your car loan can save you hundreds of dollars per month.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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