Skipping monthly loan payments | CoupleWealth
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As we grow up, we realize that our monthly loan payments are inescapable. Whether it is your mortgage, car, or credit card, we have to pay off our loans.

Do you know what’s worse than paying monthly bills? A pile of penalty fees and unending cycle of debt, which result from skipping monthly payments. Not paying your debt on time will make it much harder to reach financial freedom and can put your family in jeopardy.

Know the consequences of skipping your monthly loan payments and understand the ways to avoid them.

Credit Card Debt

Just like a late mortgage payment, your creditor will report your missed payment to the credit bureaus if it’s 30 days late. This will hurt your credit score big time. You’ll also have to pay a late fee, which usually starts at $15. This can increase to $35 if you’ve been failing on payments for the past six months or more.

If you miss two payments, your interest rate may increase and you won’t be able to reap your credit card privileges including promotional rates on purchases, balance transfers, and rewards until you catch up.


Your beloved home is at stake here. A single missed monthly mortgage payment may cause your lender to begin the foreclosure process, which could lead to you losing your home.

The foreclosure process depends on the lender since some lenders will give up to 90 or 120 days to submit payment before they start the process. As expected, you’ll have to pay the hefty late fees. The late payment will also reflect on your credit report, dropping your credit rating.

However, there’s still hope. Kevin Gallegos, vice president of the Phoenix Operations with Freedom Financial Network says that the majority of lenders won’t report your late monthly payment to the credit bureaus until it’s been 30 days late.

Car Loan

Charging late fees, increasing your interest rate, and reporting your late payment to the credit bureaus after 30 days are just some of the actions the lender may take for skipping monthly payments on your car loan even after just one missed payment. Most lenders won’t repossess your vehicle immediately unless you fail to catch up.

Just keep in mind that not all lenders are the same. There are a lot of lenders who spare no mercy when it comes to missed car loan payments. According to National Foundation for Credit Counseling spokesperson Bruce McClary, some lenders will repossess your vehicle as soon as you miss a single monthly payment.

Utility Bills

The power won’t immediately shut down after you failed to pay a single monthly utility bill. You just have to pay the late fee. But skipping monthly payments more than once and you might have to celebrate the holidays in darkness as the service providers disconnect your access to their services.

In addition to late fees, you’ll also have to pay to have your services brought back.  Same goes with cable and mobile phone bills.

What to Do When You Can’t Pay Your Monthly Bills

Let’s say you know that you can’t make a loan payment. The worst thing you can do is to just skip it. Hiding from your monthly dues will just create more damage to your savings and credit score.

If you can’t afford to pay all of your bills, here are some tips in addressing your financial blunder.

1. Try to Earn the Money You Need

Dump all the non-essentials like paid memberships and subscriptions. Refrain from eating out. Avoid the shopping malls. Sell pre-loved items and goods. Go to a pawnshop. Pick up a side job. Do everything in your power to get cash and meet your deadline so that you are not late.

2. Prioritize Your Debt

If you have more than one debt and you still don’t have enough money to cover all of the, you have decide what to pay ASAP and what bills are going to wait. List down all your debts and make every effort to pay the lenders and creditors that are likely to report you to credit bureaus – car, mortgage, and credit card. Otherwise, your credit rating will be harmed.

Paying the secured loans as well as the highest-rate debt first, like your credit card debt, is another way to save your credit score and get your finances back on track.

3. Call Your Lenders and Negotiate

If plans A and B didn’t work, just be honest. Let your lenders know that it might be impossible for you to settle your monthly payment. Then, negotiate.

Don’t hesitate to ask if they are willing to offer reduced or deferred payments, extended due date, and a late fee waiver. You are likely to get approved if you have a good credit score and you haven’t had a problem in the past.


Skipping a loan payment can have a significant impact on your credit score and your family. Not only can it impact your finances with higher interest rates, but you could have your car repossessed or home foreclosed on.

Knowing the impact of skipping a monthly payment can help you avoid it in the future. But, if you find yourself in this situation, do everything in your power to avoid it. At the very least, work with your loan company to see if they will make any exception for you.

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