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Why Utilizing a Skip A Payment Offer May Be a Bad Idea

Around the holiday season, itق€™s quite a common occurrence to receive a notification that you can skip a payment on your debt. Some lenders do this specifically for the month of December so that you can ease the burden of your holiday shopping, while others allow you to do so for the month of January so that you can start the new year off right. Although the offer to skip a debt payment can sound extremely tempting and you may think your lender is throwing you a bone, these offers often arenق€™t all they seem cracked out to be. The truth is these offers can hurt your finances more than help them.

Your Lender Will Likely Benefit

Be aware that when creditors and lenders offer to allow you to skip a payment, theyق€™re doing so because it profits them. This is due to the fact that when you miss a payment, youق€™re not simply being given a ق€œget out of jail freeق€ card for the month in which your payment schedule is paused or you donق€™t have to make that monthق€™s payment at all. Instead, the payment is typically put onto the end of your term with interest that never stops piling up.

There May be a Fee

Another factor that you have to consider is the possibility of having to pay a fee if you want to skip one monthق€™s payment. Many deals to skip a payment come with a fee that usually falls between $25 and $50. You may find that this fee is tacked on to the end of your loan term so that you donق€™t think about it very much initially. However, once the fee is added, youق€™ll have to start paying interest on it as well. If you miss even one payment a year, you may find your loan term extended by three to six months if not more. Itق€™s no wonder that lenders are more than willing to allow you to do so.

In the Case You Really Need to Skip a Payment

In the case that skipping a payment is more of a need than a luxury, you may be willing to take on the added fees and interest. If your financial situation is to the point where a skipped payment is needed for you to stay afloat, then youق€™ll likely have bigger money issues to handle and so skipping a payment can seem to come in handy. Using a skipped payment can allow you to put your money issues off for another month, however if you continue to have money troubles then youق€™ll need to talk to your lender about your financial situation. In this case then you may be able to create an affordable payment plan so that you can make your obligations. Keep in mind that using the ق€œskip your paymentق€ option likely wonق€™t allow you to make ends meet in the long term and so itق€™s best to look for a more concrete solution.

What to Do After Youق€™ve آ Skipped a Payment

If youق€™re in a tough spot and decide that skipping a payment is worth the repercussions then remember that once you do so, itق€™s important that you get serious about paying off more than just the minimum monthly amount for the next several months in order to make up for it. Of course, be aware that paying more than the minimum is a good idea whether or not you took a month off as itق€™s best to proactively dwindle your debt down as much as you canA