If you know you can’t make a payment, you need to take swift action.
A growing number of Americans may find themselves unable to make their personal loan payments due to the financial fallout of the coronavirus pandemic. If you’re one of them, the good news is you do have options — but you need to act quickly.
The pandemic has caused serious financial hardships for many families. Here are some of the techniques you can try if you find you can’t pay your lender.
1. Refinance your debt
One of the best options available to you if your personal loan payments are too high is to change the terms of your loan. Lenders usually won’t let you do that with your existing debt, but you can accomplish it if you can qualify for a refinance loan.
The current low interest rates mean many borrowers can refinance their debt at a lower rate. This would allow you to use the proceeds to repay the debt you’re having trouble with. If your new loan has a lower rate, the monthly payments may be lower and may come within your budget — especially if you also choose a longer repayment timeline.
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If you are a homeowner with equity in your home, another route might be a cash out refinance — which could potentially provide significant savings. Today’s mortgage rates are near record lows and any kind of refinance deal could lower your payments. The downside of tapping your home equity, however, is that it puts