July 20, 2018

Skip-A-Payment: Free Cash Flow with a Summertime Break from your Loan Payment

Q: Summer puts a strain on my budget because of extra expenses! I’ve been looking for a way to get through it without racking up a huge credit card bill. I’m considering skip-a-payment. What do I need to know?

A: Summer expenses can bust any budget. Skip-a-payment will give you more breathing room during this expensive time of year.
Skip-a-payment is a program offered by Interior FCU allowing members to skip a payment on vehicle and signature loans during an especially tight financial season for just a small fee. Many credit unions offer this program during the holiday season and again during the summertime. At Interior FCU, members are eligible to skip two payments per year with six months in between skips.
For a loan to qualify for skip-a-payment, you must be in good standing with the Credit Union, and active for a minimum of three months. Your loan payments must have a minimum monthly loan payment of $100 and the maximum of $2,500.

 
Here are some important points to consider before you decide to skip a payment:
 
1.) Breathing room
During an expensive time of year, you might not make it through the month without resorting to swiping your credit card – and paying high interest on every purchase you make. By skipping a large bill payment, you’ll free up some cash for your daily expenses so that you don’t finish the month in the red.
 
2.) Longer loan term
Skipping a payment means lengthening the life of your loan. You are essentially moving this month’s payment to the end of the loan.
 
3.) Accrued interest
While you won’t be racking up credit card bills with high interest rates this month, you will be billed for interest on the skipped payment. You’ll need to pay that up at the end of the loan term.
 
Did You Know?
 
  • Many people fall out of the habit of making their monthly payments when they choose to skip just one payment. Remember: This is a one-month-only deal! Be sure to make your payments next month.
  • The popularity of skip-a-payment plunged at the turn of the millennium. It is now offered almost exclusively by credit unions, with very few banks still offering it.
  • If you feel like you could use skip-a-payment every month, you may be in financial trouble. Visit our Financial Education site for advice on money management, debt counseling, budgeting tips.
Want to hit the road without worrying about bills? Visit our website today to learn about our skip-a-payment program.

 


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