On Your Side: Should you use the 'skip a payment' option? - KY3

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SPRINGFIELD, Mo. (KY3) - For many, it’s the most wonderful and most expensive time of the year.

If you’re struggling to make ends meet, you might consider the ‘skip a payment’ option offered by many banks, credit unions, and credit card companies. The skip a payment option sure sounds good, but do you qualify? It depends on your lender. Most require no missed payments within six months to a year on a line of credit that’s at least a few months old.

Read and understand the fine print. In most cases, it works like a loan extension. This skipped payment will be tacked on to the end of your loan.

You probably will have to pay something to skip. Expect to cover the interest or a fee. Mathematically, you’ll pay more in the long run, but the option is there if you need it.

“They were able to skip for December and pay their property taxes with it. If they don’t have the cash set aside for things like that, you don’t have to get a loan for Christmas gifts or travel expenses. You can just defer your loan payment or payments for a month,” said Stephanie Robb with BluCurrent Credit Union.

“If you have a $300 a month car payment, and you save the money to put back in your Christmas fund, the interest is like $10. So if it’s something you want to do, I’d recommend doing it if you are going to free up money. Instead of borrowing money at a higher rate,” said Shawn Gallagher with Pichet and Associates.

If your wallet took a hit because of the pandemic, tell your lender. Many have COVID-19 programs. Ask if you can reach an agreement, like paying the entire bill a few days late, without late fees. It never hurts to ask, especially if you have a good payment history. The same goes for your power, trash and phone bill.

One phone call can go a long way. Be honest about your situation and ask to make a payment plan.

In January, make it a goal to save a little each month for holiday spending in 2022.

To report a correction or typo, please email digitalnews@ky3.com

Copyright 2021 KY3. All rights reserved.

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On Your Side: Should you use the 'skip a payment' option? - KY3
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