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The Drawbacks of Missing Your Payments

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For most people who are experiencing financial stress, they are left with the decision to skip one or two bills payments. Before you decide to take on the same route if you run short on cash, take a look at what will happen when you start being late on your payments. 

Missing your mortgage payment. While some lenders may give you up to ninety days after missing a payment, others may start the foreclosure process right away. Even if you escape the ugliest scenario of losing your home, you will have to bear the negative effects of missed payment on your credit report. In addition, you’ll be left with additional late fees.

Missing your auto loan payment. It’s not likely that the repossession process starts after one single payment, but still, you will have to suffer from late fees and interests, which will make it even harder to catch up on your payments, thus putting your vehicle at risk. In addition, the lender will report your missed payment to the credit bureaus after 30 days, which can have an effect on your credit score.

Missing your credit card payments. There are a number of disadvantages with missing your credit card payments. First, this will be reported on the credit bureaus and can cause a credit score drop. Second, if your card offers a rewards program, you may not be able to use those rewards until you’ve caught on your payments. Third, you may lose any promotions on purchases or balance transfers. Lastly, your interest rates could soar together with your balances and late charges so you might find yourself on a vicious cycle of paying only the minimum until your debt piles up.

Missing your utility payments. Most companies won’t terminate your services immediately after a late payment, however, in continuously doing so, you’re putting your services at risk for being disconnected. Moreover, you’ll get charged a late payment fee and might even have to pay restoration fees as well to turn on your services.

Missing your mobile plan payment. Aside from being charged a late fee, your network provider might temporarily disconnect your mobile phone services and charge a reconnection fee.

Missing your student loan payment. Like the rest, the late payment on your student loan will incur late charges and interests and will be reflected on your credit report.

Once you begin missing payments, you can always expect late fees and soaring interest rates, aside from the fact that you’ll have to make two months of payment on your next bill. This will make catching up too difficult and costly.

If things got rough and you really can’t afford to pay, don’t just skip on your bill. Take the time to call your lender, creditor, or service provider and inform them that you can’t make the payment this month. Inquire if there’s any way to waive late payment charges or to extend your due date. If you make an effort to communicate instead of just hide from them, you’ll discover how cooperative they can be.

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