If You’ve Fallen Behind on Your Credit Union Loan, Here’s what to Do
No one takes out a credit union loan with the intention of falling behind on their payments. Unfortunately, it's common for people to miss one or more of their loan payments. If you're behind on one or more of your loans, here are a few steps you need to take to get caught up and minimize the impact on your finances:
How to Handle Late Payments on Your Credit Union Loan
1. Make a List of Your Monthly Expenditures & Income
Make a comprehensive list of all your monthly expenditures; include both your fixed expenses (bills that remain the same each month) and your variable expenses (items that fluctuate, such as your grocery bill or entertainment expenses). If you're not sure how much you spend on variable expenses, review your last few months of account statements. Then, add up all the income you receive in a month. Subtract your monthly expenditures from your monthly income to see where your finances are. This will help you figure out if you're barely breaking even or if you're running a regular budget deficit that makes it hard for you to pay your credit union loan.
2. Find Expenditures You Can Reduce
Once you have a better idea of your monthly cash flow, you can decide what items you can cut back on to better make your credit union loan payments. For example, if you spend a lot on entertainment, you might explore cheaper alternatives. Or, if you have expensive vehicle payments, you might decide if it makes sense to sell or downsize one of your vehicles.
3. Contact Your Creditors
If you've fallen behind on your loans, it's important to contact your creditors as soon as possible. Not only will this allow you to work out a plan to get caught up on your credit union loan, but your lenders will be able to make note you're actively working to bring your payments up-to-date. Some lenders even have programs to help past-due borrowers.
4. Ask for Any Loan Modification in Writing
Should you receive a modification for your credit union loan payment (like a temporary interest rate reduction or payment forbearance), get the details in writing. This will ensure you know the exact terms and conditions of the modification.
5. Explore Long-term Alternatives
Adjusting to a long-term change in your financial situation, like a permanent income reduction, is a little trickier than handling short-term challenges to your finances. Consider alternatives to help you better weather these long-term challenges.
One alternative might be a loan product that enables you to consolidate your credit union loan and other forms of debt into a single loan product. Debt consolidation may allow you to lower your monthly payment and interest rate. Or, you might refinance your mortgage (one of the largest expenditures for many households) so your payment is lower, freeing up money for you to pay your credit union loan and other debts.
For more information on how to stay up-to-date on your credit union loan payments, contact Clark County Credit Union at 702-228-2228 today.