Everyone knows what it is like to struggle financially sometimes. When this happens, it is extremely tempting to skip on your monthly payments. However, skipping a monthly payment can have some serious consequences, so let us take a closer look at the payment you cannot afford to skip!
When someone struggles with their finances, the monthly mortgage payment is often the first thing to suffer. Many Americans believe they have 90 days to catch up before the foreclosure process starts, but this is actually not true.
Some lenders can begin the foreclosure process after you miss a single payment! Missing a payment also means you have to catch up next month and pay a late fee. A missed payment will also have a negative influence on your credit report.
Credit Card Payments
One of the most common monthly payments to miss are credit card repayments. Your late fee could be up to $25, or $35 depending on the credit card. (If you are a regular payer and haven’t missed a payment previously, you can call your credit card company to remove the fee. It may work)
When your payment is 30 days overdue, the creditor will report this to the credit bureau. Therefore, your credit score will also be affected. At a minimum you should try to pay the minimum amount each month, so you don’t get charged the late fee.
You could miss a gas, electric or water bill from time to time. Even though this is not a major payment to miss, you will be faced with a late fee each time you miss a payment.
Most utility companies will shut down your utilities for a single missed payment, but they might do so if the payment is not settled for a second time. Also, some companies charge a so-called restore fee to start providing their services again.
Car Loan Repayments
Another monthly payment you could miss is your car loan repayment. Like with credit card repayments, the lender will automatically report the missed payment when your payment is 30 days overdue; this also means that a missed car loan repayment can affect your overall credit score.
Cell Phone Payments
When you miss a cell phone payment, your service provider might disconnect you; this usually does not happen instantly, but could be a possibility if your payment is not settled within 30 days. If your phone service has been disconnected, you may need to pay a re-connection fee too.
Student Loan Repayments
Even though this type of loan repayment does not apply to everyone, it is certainly worth mentioning here.
Late repayments of a student loan can affect your credit score, because any late repayments are included in your credit report. Most lenders also charge a late fee and it could affect your interest rate for further repayments!
There are many monthly repayments that can have a serious negative influence on your credit score. Therefore, it is vital to stay on track with your repayments and never miss a single one!
So, how can you ensure you make your repayments in time? Well, the best way is to make a budget for yourself and have a calendar with repayments you need to make every month. By having a budget and a calendar, you can make sure you never miss a payment again! So, the best policy to avoid missing repayments in the future? Having a good plan in place.