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What is an arrears balance on a car loan?
I was late on a car payment. Now I look at my statement and it says I have an arrears balance of $401. What does this mean?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
An arrears balance may sound confusing, but it’s actually quite simple.
This term refers to any amount of money that’s due on a
car loan
after the payment due date. Because you were late on your car loan payment, the amount you owe is simply listed as an arrears balance.Once you square up with the bank on this payment, you should see the arrears balance disappear because you no longer owe any extra money on your loan.
Don’t stress too much though. Although you may owe a bit extra in interest or late fees, lenders won’t report a lack of payment to the credit bureaus unless you’re more than 30 days late on your payment.
If you’re having trouble paying your car note on time, search for savings in other places. A good place to start is your car insurance. Rates can fluctuate over time, so when your policy comes up for renewal, shop for other rates with the
Jerry
app. Download the app, sign up in minutes, choose your policy, and Jerry takes care of the rest! 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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