Ever found yourself in a tight financial spot where paying your monthly loan installment seems like an impossible task?
Skip-A-Pay is a program offered by some banks and credit unions where you can skip one or more monthly loan payments without incurring any late fees or damaging your credit score. Skip-A-Pay could be available for car loans, personal loans, or even mortgages and credit cards. (Psst... But many financial institutions don't offer Skip-A-Pay for the same types of loans or for every loan. Check your financial institution's Skip-A-Pay program requirements to learn which loan you can skip a payment for!)
Skipping a payment means that the payment is deferred to the end of the loan term, or the loan term is extended by an additional month. Skip-A-Pay can be offered for a variety of reasons, like:
QUICK TIP: It's essential to understand that Skip-A-Pay isn't free; there may be an additional processing fee charged by the financial institution, and the interest will continue to accrue during the skipped payment. |
Each financial institution may have different eligibility criteria and rules for Skip-A-Pay. Typically, loan account holders need to meet certain requirements, such as:
Want to know what Skyla's loan officers like to see when reviewing a Skip-A-Pay request? Here's what you should know.
Skip-A-Pay can be a great way to manage your finances when you're tight on cash or have unexpected expenses. By skipping a payment, you can free up some money to allocate toward other financial priorities without risking any late fees or credit damage. Additionally, by extending the loan term, you can spread out the total cost of the loan, making it more manageable in the long run.
QUICK TIP: Even though it may be a good idea to do Skip-A-Pay, remember that Skip-A-Pay is not a debt forgiveness program, and skipping payments will increase the total interest paid over the loan term. |
While Skip-A-Pay programs can provide some relief to those who need it, it's important to carefully consider whether it's a good idea to skip a payment on a loan. Here are some pros and cons that'll help you when weighing to skip or not to skip:
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When considering whether to skip a payment on a loan, timing is an important factor to consider. If you're experiencing temporary financial hardship due to unforeseen circumstances, like a medical emergency or unexpected car repair, then skipping a payment may be a good option to help you get through a tough patch. In this case, it's important to communicate with your lender as soon as possible to discuss your options and determine if skipping a payment is the best course of action.
On the other hand, if you're simply looking to free up some cash for a non-essential expense, like a vacation or shopping spree, it may be better to avoid skipping a payment. Doing so can ultimately cost you more in interest over the life of the loan and may negatively impact your credit score if not properly communicated and approved by the lender.
Usually, no! Unless you wake up one morning and decide to not make your loan payment without informing your bank or credit union.
Skipping a loan payment usually won't affect your credit score. However, it's important to communicate with your lender and make sure they're aware that you're skipping a payment.
Generally, lenders will report your loan as "current" if you have a payment arrangement in place, even if you're not making payments. If the lender isn't made aware of your payment arrangement, they may report the loan as "missed," which could negatively impact your credit score.
Yes, as I've mentioned earlier, there may be a fee to skip a payment, depending on the financial institution's policy. Some lenders may charge a one-time fee, while others may charge an interest penalty. It's important to read the terms and conditions carefully and understand any associated fees before deciding.
Skipping a payment can be a great way to free up some cash, but it's important to make sure that you understand the full costs before proceeding.
Yes, but it's not much! Plus, the fee is automatically added to the loan balance. Learn more about Skyla's Skip-A-Pay program and other requirements when applying:
Yep! Keep in mind that your loan balance will not be reduced during this time, and the interest will be added to the loan balance at the end of the period. This means that if you do choose to skip a payment, you will ultimately end up paying more in interest over the life of the loan. Keep this in mind when determining whether it makes sense to skip a payment.
The number of times you can skip a payment on a loan varies from lender to lender. Some may allow up to two skipped payments and others may not allow borrowers to skip two months in a row. There may be a limit on the number of times you can skip a payment, and approval is not guaranteed.
Make sure you communicate with your lender to understand the specific eligibility criteria and rules for Skip-A-Pay and determine if it makes sense for your situation.
Skip-A-Pay can provide valuable assistance to members facing financial hardships or in need of redirecting their funds temporarily. It is important, however, to recognize that Skip-A-Pay is not a long-term solution and must be used judiciously and with proper planning. Consistently skipping payments can lead to increased interest charges and delay the repayment of the loan.