Have you ever been late on a loan repayment? It seems that just at the time that you need it least, banks and other lenders slap hefty charges on your account. This is the last thing you need, especially when you're finding it difficult to keep up with your repayments. In a way, it's like the proverbial snowball effect, where one late payment leads to one late fee (which is applied towards your payment), and since that late fee makes it difficult to make the next month's payment, that too comes in late, which leads to another late fee, and so on and so forth. When everything is said and done, every cent that you pay on your loan is paying off those nasty late fees - OUCH!
How do you deal with this and escape with your sanity - and your bank account intact?
Consider this first and foremost - nobody in their right mind would charge a late fee if you were late repaying a late fee that had been previously assessed. For example, suppose you owe $100 on a credit card. If you were late you might incur a $20 late fee. On the next bill, you will still be owing the $100, plus the $20 late fee and the interest charged on the $100. If you only have enough for the $100 plus interest, pay that, and tell the lender in your bill payment that it's for your regular payment. Sure, you'll still be owing $20 for the late fee, but at least nobody can charge you another late fee for a late fee not repaid in a timely manner.
In addition, if you have multiple accounts open, you'll want to keep each of them up to date save for the late one. Don't be late on one account this month, and another account next month. And for both months, remain late on the same account where you were previously late. Here's the rationale behind such an unusual (yet effective) strategy - credit card companies or lenders can only charge so many fees. And you could incur multiple fees if you allow yourself to make late payments on different accounts.
Is There Anything I Can Do if I Can't Make a Timely Payment?
The best thing to do would be to sum up your courage and tell your creditor honestly that you cannot make a timely repayment. This is, simply put, the honorable thing to do, rather than let the bill go unpaid with nary a word of advice explaining why. Many creditors will allow you to reschedule your payments, or give you extra time without charging you for this. Remember that you are dealing with financial institutions, and they would definitely prefer to get their money somehow and have an assurance of such, instead of not getting paid at all and not knowing why.
Now if worst comes to worst and the creditor refuses to play ball, you can let that payment slide for one month only, and focus on another creditor and see if you can convince them to help you.
How do you deal with this and escape with your sanity - and your bank account intact?
Consider this first and foremost - nobody in their right mind would charge a late fee if you were late repaying a late fee that had been previously assessed. For example, suppose you owe $100 on a credit card. If you were late you might incur a $20 late fee. On the next bill, you will still be owing the $100, plus the $20 late fee and the interest charged on the $100. If you only have enough for the $100 plus interest, pay that, and tell the lender in your bill payment that it's for your regular payment. Sure, you'll still be owing $20 for the late fee, but at least nobody can charge you another late fee for a late fee not repaid in a timely manner.
In addition, if you have multiple accounts open, you'll want to keep each of them up to date save for the late one. Don't be late on one account this month, and another account next month. And for both months, remain late on the same account where you were previously late. Here's the rationale behind such an unusual (yet effective) strategy - credit card companies or lenders can only charge so many fees. And you could incur multiple fees if you allow yourself to make late payments on different accounts.
Is There Anything I Can Do if I Can't Make a Timely Payment?
The best thing to do would be to sum up your courage and tell your creditor honestly that you cannot make a timely repayment. This is, simply put, the honorable thing to do, rather than let the bill go unpaid with nary a word of advice explaining why. Many creditors will allow you to reschedule your payments, or give you extra time without charging you for this. Remember that you are dealing with financial institutions, and they would definitely prefer to get their money somehow and have an assurance of such, instead of not getting paid at all and not knowing why.
Now if worst comes to worst and the creditor refuses to play ball, you can let that payment slide for one month only, and focus on another creditor and see if you can convince them to help you.
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