Car Loan Default

Car loans are popular because of their usefulness, but what if you don't stick to payment terms? You do not want to make a mistake on your Car Loan for obvious reasons. One, it will damage your credit history and damage your Credit Score, and second, the bank can get your car! But when does the default occur? Does making a deferred payment or dismantling it for a month or more mean a mistake? Will your car pass at that time? Find the answers below.

When Does the Default Happen?

Technically, a Car Loan failure occurs when a customer repeatedly fails to repay an agreed Car Loan to a creditor/bank that has borrowed money for its purchase. But is there a fixed number of default payments? Yes. Usually, a Car Loan agreement signed with your lender/bank will have these clearly defined terms. All about your Indian Overseas Bank Car Loan, your mortgage obligations, and if you fail to pay it is usually explained here. The agreement may also provide for the risks involved and possible solutions if the error is not paid.

Although the term 'default' has no meaning everywhere and varies depending on the case, the most common cause of 'default' upon arrival is 30, 60, or 90 days for not making one or more payments. Having said that, it is important to know what you should be doing when you wake up to the fact that you can have a hard time making your monthly loan payment and avoid being labeled as a 'default' customer.

The problem starts when you are afraid that you will not be able to pay the car loan and start avoiding the lender/bank. Never do this. Most lenders/banks will deal with debt issues depending on the cases. They may have heard it a thousand times before but being honest can help you and bring you a better name.

• Try talking to your lender/bank to extend the duration of your car loan. For example, if you initially take out a Car Loan for 36 months you can ask for it to be extended to 48 months. This will ensure that your monthly commitment goes down.
• Ask your lender/bank if he or she would consider giving you late payment. It means you will be allowed to exceed the current monthly payment and make it on a certain date. Explain that having a monthly payment will give you much-needed flexibility.
• See if you can get your lender/bank to change the payment date permanently.
• Costs are mostly charged on your late payment. If you feel that these late payments are burdensome and prevent you from making timely payments, ask your lender/bank to waive these payments. If it helps to pay on time, the lender/bank can approve.
  
  
  If none of the above options work?
  
  
  As stated, if payments are not made as per your agreement, it is deemed to be a default. The obvious downside to this is that the lender/bank can repay your car. Depending on your loan agreement, the lender/bank will send you a written notice of failure to ask you to pay the balance left on your Car Loan or contact. If the notice is not honored within the time specified, your vehicle will be forfeited.
  What Do Banks Do With Such Vehicles? How do they get their money back?
  
  
  As mentioned, a confiscated car is usually sold at auction to pay off your default loan amount. Auction details are well advertised and well-executed. Usually, the lender/bank automatically informs you or the customer of the location and time of the auction so that if you want to bid or just see how the auction goes you can do that.
  Your problems may not end when the car is sold at auction! There may be another serious collapse of your default. Your credit record will take a beating and if you do it you may not be in a position to get any new loans over the next 7 years. This can force you to enter bad credit markets where interest rates are alarmingly high!

For more information: Transfer Process of A Car Loan