| When the concept of loan modifications became | | | | own negligence. Otherwise, you would look |
| universally popular, it was all about home loans. Then, | | | | irresponsible for not paying and be considered a risk |
| the idea was picked up in the commercial market as | | | | no matter what the payment. Medical issues and |
| well. Now, we are seeing more and more auto loans | | | | employment concerns are chief examples of hardship |
| being considered for modification as well. | | | | that you can claim has seriously effected your ability |
| On the surface, the idea of modifying much smaller car | | | | to pay your loan. |
| loans may seem a little odd, but it's very necessary to | | | | - Financial Picture. No modification can take place |
| the many people looking for relief in tough economic | | | | without a serious breakdown of your financial situation. |
| times. | | | | How much are you making? How much are you |
| Why do we need auto loan modification? | | | | spending? What's the difference at the end of each |
| The reasons someone may need to modify their car | | | | month. Too far either way (surplus or deficit) and you |
| loan are very similar to that of any other type of loan. | | | | won't be a serious candidate. A heavy surplus is |
| Economic and/or personal hardships have created a | | | | looked at as if you can easily afford the current |
| lot of situations where people are looking for answers. | | | | payment. A heavy deficit is looked at as if you won't |
| Job loss, reduction of income, family emergencies...all | | | | be able to afford even a modified payment. As such, |
| are perfectly viable reasons to get your car loan | | | | the closer your bottom line is to 0 every month, the |
| modified. | | | | better. |
| As an example of why you may need to get a car | | | | - Are you late on payments? Whether it's right or |
| loan modification, say you recently lost your source of | | | | wrong, lenders tend to look at those that are late on |
| income or a significant amount of it. Your car payment | | | | payments with a more serious eye than those that |
| at $500 was once very much within your means. Now, | | | | are current. The thinking goes that if someone is |
| not so much. The lender doesn't really want to | | | | current, then they can make the payment so why |
| repossess the car. That's not in their best interest. The | | | | bother modifying the loan? Even though being late |
| lender has incentive to consider a lower payment | | | | seems to help your cause, it's never advised to |
| based on what you can reasonably afford. If you can | | | | purposely miss a payment. After all, you no one wants |
| get that payment down to $300, perhaps it's now | | | | to be late and it can have serious negative effects on |
| affordable based on your unemployment or reduced | | | | your credit. |
| income. It's a win-win for both parties. | | | | An experience professional can help you navigate the |
| How are you going to qualify? | | | | process and figure out if you qualify. Don't take the |
| Qualifying depends on a variety of factors. Let's look | | | | process lightly. Your car loan may not compare to a |
| at the ones that are most common. | | | | home loan, but it's still a serious financial matter that |
| - Hardship. Your lender wants to see that your inability | | | | requires you to make prudent decisions that give you |
| to pay is brought on by some hardship and not your | | | | the best future. |