Those with bad credit can be lured into loan modification by lending companies. This is especially true if the borrower is having or has had trouble sticking to the payment schedule set by the lender. Complete Auto Loans is here to advise borrowers to the hazards of modifying their car loans. Loan modification is not the only answer to a defaulted loan.
Car Loan Modification Good or Bad?
Car loan modification may seem like a good step to take to offer borrowers relief from their debt, but that is not usually the case. Even the Federal Trade Commission (FTC) advises against this actionable step. In many cases, these loan modification companies told borrowers to stop paying their loan. This is terrible advice and will only result in damaging a credit score and repossession of the car. That is not the only troubling part of loan modification. Some of these companies charge exorbitant fees and make no progress in getting the loan paid off.
Contacting the Lender or the Borrower?
Instead of seeking out advice from a loan modification company, borrowers should contact the lender and be truthful. In the end, they want their money. All the borrower needs to do is work out a new payment plan with them. Lenders are usually happy to make changes. It is more work for them to repossess the car than it is to make a deal. This will likely result in lower monthly payments, but the interest on the loan will be the same or increased, and the life of the loan will obviously be longer. These things should not matter nearly as much since doing so will keep your credit intact and allow people to borrow money for other things. Having to rebuild credit can take years.
About Complete Auto Loans
Complete Auto Loans is a provider of national car and auto financing. We specialize in auto and car loans for no credit, bad credit, good credit, and student auto loans. No matter what the condition of the borrower’s credit at the time of the application, Complete Auto Loans qualifies almost 100% of loan applicants.