Financial Hardship Assistance for My Auto Loan
Finding financial hardship assistance for a car loan may help provide relief for a car owner who is dependent upon their vehicle but are facing loan default or repossession of the vehicle. This situation occurs especially where the value of the car is less than the value of the loan. In these circumstances, finding ways to refinance or restructure a loan in order to keep the car benefits not only the car owner but the lender as well.
Sources for Financial Assistance
The programs that are available for vehicle financial hardship assistance are generally run by a state or private source. There are no current federal programs that are available for financial hardship although there are some rebates and economic stimulus related programs designed to encourage the purchase of fuel-efficient cars in favor of older ones. The state and private programs vary in scope and the types of assistance that they provide to a qualified individual.
Loan Modification Programs
There are programs that call for loan modifications. A loan modification allows the borrower to work with the lender in order to recast the loan on terms that are favorable. This allows the lender to avoid repossession costs while the borrower can continue to drive the vehicle with a payment schedule that is affordable.
Consulting a Lender
A borrower facing a financial hardship or potential repossession of their car should consult with their lender. The lender should be able to find assistance programs that are available for the borrower based on their financial hardship. This allows the lender to continue to receive payment and service on the loan.
A borrower should also work directly with a lender to determine how to save the vehicle from repossession and determine if there are secondary guaranty or loan forgiveness programs that the borrower may qualify for. Ultimately, the lender will receive some consideration for the loan and its terms but the lender’s interests are not served if they ultimately have to take possession of the vehicle away from the borrower. Accessing a financial hardship assistance program is a way for a lender to recoup some of the loan without losing out completely.
Facing Financial Hardship
As more and more individuals face uncertain economic times, lenders are more apt to work with a borrower who presents a reasonable solution to avoiding financial hardship. A smart lender understands that an economic or financial hardship can happen to anyone and is more inclined to help the borrower access the available funding through a financial assistance hardship program in order to retire the debt outstanding.