Car loan debt driving you mad?

October 9, 2014

Borrowing money to pay for a car or a vehicle of any sort is a very common practice in Scotland and the rest of the UK. The reasons are obvious enough as they allow an individual to buy a car immediately without having to pay for it upfront.

There are two main ways of using finance to acquire a car and spread the cost. The first is to take out a personal loan specifically to pay for a car and the other is hire purchase, which involves paying instalments over a period of months or years until the car is paid for in full.

In either instance, if you can’t afford your car finance arrangement then it can lead to, or exacerbate, personal debt problems.

Here are some ways of taking action to prevent your problems making car payments from becoming serious threats to your finances:

Get in touch with your lender

As with any kind of personal debt or finance arrangement, if you are struggling to maintain your car loan or hire purchase plan then you should get in touch with the lender right away. It’s often tempting to hope these kind of issues will go away or resolve themselves but in reality that’s not going to happen.

It’s much better in the short term and in the longer run to communicate the problems you’re having with the relevant parties involved. By doing so you make it much more likely that you’ll be able to find a resolution to your problems that doesn’t involve losing your car or racking up larger and larger loan debts.

Come up with a plan

Having a plan of action can make a big difference in the context of any effort to improve a personal finance situation. If you’ve decided that servicing your car loan or maintaining your car finance deal is a priority then it is worth making sacrifices and establishing a plan to see these goals achieved.

If you’re finding it difficult to see how your car finance might be afforded then a debt adviser from Scotland Debt Solutions can help you. We’re experts in crafting the kind of plans and strategies that mean indebted individuals can achieve their aims and manage their finances effectively, even under very challenging circumstances.

Work with your creditors

One way in which it’s possible to find some relief from your debts and create enough room in your financial picture to continue covering your car finance deal is through debt consolidation. This, though, might only have the effect of replacing one kind of unaffordable debt for another.

Ideally, if you are finding it tough to keep pace with the terms of your car finance deal then you will be able to reach an agreement with your creditors that gives you more time to pay the money you owe.

It could be that your creditor in this situation will not be willing to work with you in this way and they’ll demand your car be handed over. But it might equally be the case that your creditor views a debt management plan as the best way for them to see the money they’re owed repaid in full.

Getting the right advice

Whatever the circumstances are surrounding your car finance debts or arrangements, it’s generally a good idea to seek advice on the key issues and to get some guidance on how best to proceed. Regardless of the severity of your debt problems, there are solutions and routes forward available to turn your situation around.

Call SDS today for a confidential chat about your finances.


John Baird

Insolvency Adviser

Tel: 0800 063 9250

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