Can't Afford Your Balloon Payment? Here's Your Solution
If you’re close to the end of your loan term, you may be aware that your balloon payment will soon be required by your lender. If you’re struggling financially or simply just can’t pay your balloon payment back in full or on time, it can cause a lot of stress.
At Positive Lending Solutions, we help make car loans a stress-free experience by finding options that work best for you.
What is a balloon payment?
If you have a balloon payment on your car loan it’s really important that you fully understand what the term actually refers to.
A balloon payment is a lump sum that you owe the lender at the end of your agreed loan term. It is also referred to as a ‘residual’ payment.
Balloon payments are usually an attractive option when it comes to getting a car loan as it allows you to reduce your regular repayments – but what about when you have to pay it back?
Ever heard of refinancing? At Positive Lending Solutions we want to be able to offer you a positive solution that will take away your financial concerns as well as keeping your lender happy. If you can’t pay the balloon payment, you may want to consider the option of refinancing your car loan.
Refinancing will not only allow you to deal with your balloon repayment, but you’ll also get to keep your car.
Refinancing is a way of putting a new loan in place to replace your current loan – and the best thing is that it can allow you to pay off your balloon payment over a set period of time, instead of having to pay it back in a lump sum. This can take a huge financial pressure off you and allow you to budget accordingly to pay the balloon payment back in smaller amounts.
Many people are keen to refinance their car as it helps them to avoid the often unappealing situation of having to sell their car simply to finance paying their balloon payment back to their lender.
End of Loan Refinancing
Whereas some people use refinancing to help them to get a better interest rate or to get better terms for their car loan (mid term refinancing) , Positive Lending Solutions will generally direct you to end of loan refinancing if you can’t pay balloon payments.
Refinancing your car loan will help you to avoid the other options you’d be facing if you can’t pay your balloon payment such as :
- Having to sell your car to pay back your balloon payment
- Trading your car in to pay back balloon payment
- Finding the money yourself to pay back balloon payment
If you’re happy with your current car but simply need a little more time to pay back your balloon payment, refinancing your car loan could be the ideal solution.
Ask for expert help
Finding yourself in a position where you can’t afford your balloon payment can be incredibly stressful. You may be aware that the end of your loan is approaching yet you’re simply not in a financial situation to make the lump sum payment to your lender. This can cause a huge amount of anxiety and worry about damaging your credit score and getting into debt.
At Positive Lending Solutions we have decades of experience working in the car loan industry and we’re able to help you find the best repayment options for you. We always want to make the car loan process as simple and efficient as possible – contact us today to get started.