Missing a loan payment is a big deal. If you miss a payment, it will be recorded on your credit score and you’ll likely be charged a missing payment fee the next month. So what happens if you’re struggling to make a loan payment?
One option may be Skip-A-Pay. It enables borrowers to skip a payment on either a loan or credit card for one month, without affecting their credit score or leading to any other negative legal ramifications.
What Is Skip-A-Pay?
Skip-A-Pay is a service offered by some lenders in order to help borrowers who are having temporary difficulty making a loan or credit card payment. Skip-A-Pay may be available for personal loans, home loans, car loans and so on.
The skipped payment is added onto the loan payment schedule, so you’re still paying back this money—just at a different date. Do be aware that using Skip-a-Pay extends the life of your loan and interest continues to accrue when a payment is skipped, which means more interest to pay in the long run.
How Often Can You Skip?
Every lender has different rules about how often a loan payment can be skipped. HUECU lets eligible borrowers skip two payments per loan during a 12-month period. However, the skipped months can’t be consecutive.
If you do find yourself repeatedly needing to use Skip-A-Pay, it’s probably a good idea to sit down with a financial counselor and take a closer look at how to manage your finances. Keep in mind that HUECU members get free access to the GreenPath Financial Wellness Program—so don’t be afraid to use this benefit if you need it.
Who Should Use Skip-A-Pay?
Skip-A-Pay is a good option for borrowers who are in a temporary pinch and need a little extra money for the month. The ability to skip a payment is usually not available to borrowers who are behind on payments—your account should be current and in good standing.
If you have a federal student loan, look into student loan deferment rather than Skip-A-Pay. A student loan officer can walk you through the options available from the federal government, including an income-driven repayment plan or economic hardship deferment.
Skip-A-Pay might not be the right choice for borrowers who are facing sudden or significant financial hardship and expect more trouble making loan payments over multiple months. If this applies to you, speak with your loan officer about the potential for a longer-term loan deferment plan. Remember: it’s always better to speak up and ask for help, rather than missing a required payment!
What Else to Know?
There is usually a fee associated with Skip-A-Pay, so expect to pay around $25 if you want to skip a payment. Submit your Skip-A-Pay request as soon as possible, so that you don’t accidentally miss the due date and get stuck with a bill you can’t pay.
Finally, along with taking advantage of Skip-A-Pay, borrowers can also investigate more options if they’re struggling to make loan payments. Debt consolidation loans or loan refinancing could result in lower monthly payments, so be sure to check in with your lender about all your options!
