Strategies to Remember So You Don't Miss a Debt Repayment

As the holidays approach, it’s important to remember not to overspend. Especially if you are using credit cards. That’s because when money is tight, you can worry that you won’t be able to make your monthly payment or payments. If you think you’re going to miss a payment, you might start panicking about what’s going to happen. Are you going to be in a lot of trouble? Can you miss one payment without it mattering too much? What if you can’t afford subsequent payments? When you’re concerned that you might miss a payment, here are some things to do.

Understand the Consequences

Before missing a payment, it’s a good idea if you know what effect it’s going to have. Missing a payment will often mean that you have to pay a late fee, adding to the expense of your payment. It can also leave a mark on your credit record, which will affect your ability to borrow in the future. Lenders might use their first-party collections department to call you or send you letters to collect their payment, especially if you miss more than one. There could even be legal action if you don’t pay your debt.

Contact Your Lender

If you think you’ll be unable to afford a payment on your debt, the first thing you should do is contact your lender. Your instinct might be to try and ignore the problem, but contacting your lender can help you to address it head-on. If the issue is a short-term one, your lender might give you a little more time to pay what you owe. They might also delay reporting the missing payment to credit bureaus. It’s worth discussing longer-term problems with them too. They might be able to help you with a new payment schedule or some time to work out what you’re going to do next.

Avoid Payday Loans

When you don’t have enough to cover a payment, you might be tempted to take out a short-term loan. Maybe you think that you’ll pay it back on your next payday, or you’ll have thought of another solution by the time repayment is due. However, it’s best to avoid these high-interest loans if you don’t want to get into further financial difficulty. Payday loans are expensive, and if you miss a payment, you could face high fees on top of the high interest. You could end up in a cycle of taking out a new payday loan to pay off the previous loan.

Prioritize Your Debts

When you have several debts to pay, you need to know which ones are most important. Some are more important to pay on time than others, which have less serious consequences. Your mortgage and utility bills are important to pay on time, or you could risk having your utilities turned off or losing your house. Although you shouldn’t ignore other debts, like credit cards or unsecured loans, the consequences of not paying could be less serious and not as quick.

If you think you’ll miss a debt repayment, don’t ignore it. It’s better to face the problem and try to deal with it.