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Millions can’t pay their car loans. Here’s what to do if you’re one of them

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Even though the government has provided some intermittent assistance during the coronavirus pandemic — stimulus checks and expanded unemployment benefits — millions of Americans are having trouble making ends meet. Almost 32 million collected unemployment in July. The eviction protections secured by the CARES Act have now expired. And the $600 enhanced unemployment payments have now ended, too. Whether it’s paying the mortgage, keeping the lights on or simply buying groceries, millions of people are in dire need of cash.

But just like the help available with rent payments and unemployment benefits, you do have to ask. The worst thing you can do is ignore the problem and assume it’ll work itself out on its own. (Scroll to the end for what else you should absolutely not do.)

You’ll want to know what kinds of programs your bank, credit union or other auto loan provider may have available to you. Also, if there are any state laws that might offer some protections against repossession, you’ll want to find out about those, too. 

Unemployment insurance: If you’ve lost your job, you can file for unemployment. While you won’t get the extra $600 per week on top of what your state currently covers since the CARES Act ended those benefits in July, you’ll still qualify for some benefits.

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With a traditional loan, you receive a lump sum and then start to make payments back over a set amount of time — from a few months to a few years — with a “reasonable” rate of interest added on. With a payday loan, the full amount comes due all at once, including mouse click the following web site interest and fees. With most, you’re required to write a postdated check for the full amount due — the loan, plus interest and fees — or give your lender permission to debit the money from your bank account on that date. 

Why you should stay away from payday loans There are twice as many payday loan lenders than McDonald’s restaurants in the US — and borrowing money from one is about as easy as ordering a burger and fries. Getting approved is relatively easy: Many payday loan lenders won’t even , so a tarnished credit history won’t be a factor.

If you’ve fallen behind (or you think you’re going to fall behind) on your car payment for 90 days or longer, you may very well be at risk of having your car repossessed. Your lender may be more lenient if you’ve never missed a payment before, but the more often you’ve been late in the past, the sooner they might attempt repossession. 

If your state allows payday loan lenders, you might see them in some parts of your city and not others. For instance, there might be more of them where poverty rates are high and income levels are low. These types of lenders tend to target minority groups as well as those who have very low credit scores who don’t otherwise qualify for traditional loans.

If you , it may be difficult to secure a traditional loan or credit card. But there are plenty of lenders that will let you borrow without a credit check, with few questions asked. The terms will be severe, however, and they’ll certainly end up costing you far more than you borrowed. With a deserved a reputation for “predatory lending,” payday lenders have led many borrowers into a spiral of debt and regret. 

How can I qualify for a coronavirus hardship loan? Some hardship loans require you to document how you’ve been impacted. House says lenders are currently more focused on proof that you’ll be able to repay the loan. 

In most cases, your lender will contract with a third-party agency that specializes in repossessions. That company will use whatever information it can get — your home and work addresses, for example — to track down the vehicle and tow it to a secured, usually gated lot. It does not need your car keys to take your car. 

A coronavirus hardship loan can help. It’s a personal loan that can help provide temporary financial relief from the impact of the pandemic. If you’ve lost your job, your income has been reduced or you’ve blown through the government stimulus money, a hardship loan could help you float until things stabilize.

How much can you borrow with a coronavirus hardship loan? It’s flexible, with many lenders offering between $500 and $5,000, though House mentioned some loans of $10,000. Most institutions assess each loan on a case-by-case basis. 

What is a coronavirus hardship loan? Designed to provide temporary financial support during this turbulent time, a coronavirus hardship loan generally features lower interest rates and deferred repayment options so you won’t need to start paying it back right away. It can be a helpful stopgap when you need money now and may not have the means to pay it back in the near term.

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