Skip a Loan Payment: Your Ticket to Financial Relief

There are times in your life when you need to have some extra cash in your wallet. An emergency or essential expense can pop up that is not part of your budget for the month. When these circumstances arise you can opt to skip a loan payment.

If you have a loan in good standing, you could qualify for a loan payment relief so you can breathe easy for the month and focus on your other needs.

Understanding the Skip-a-Payment Process

Skip-a-payment service is a program that allows members to skip a monthly payment on their loan during a tight financial situation. Skipping a loan payment means your lender allows you to skip a payment once or twice a year for a small fee.

Most credit unions allow skip a loan payment for loans with a 12-month term or longer and for members with a good payment history for at least 6 months. You can avail of this offer based on the eligibility criteria of the credit union.

It is important to understand that while a loan payment relief gives you temporary relief from paying your loan, interest continues to accrue during the skipped month. The interest rate depends on the rate stated in the loan agreement.

Your skipped monthly loan payment will be moved to the end of your loan term. This means your loan term will be extended for one month or two months, depending on how many times you availed of the skip a loan payment.

Most credit unions offer this program during the summer vacation and holiday seasons or any time of the year.

Benefits of Skipping a Loan Payment

Skipping a payment allows you to have some financial flexibility.

Extra Cash

Having extra cash during an expensive time of the year or when you are strapped for cash is the main benefit of a skip-a-payment service. You can have more financial flexibility to get through a temporary hardship.

Protects your Credit

Missing a monthly payment can harm your payment history. When you avail of loan payment relief helps you maintain a good payment history.

Avoid New Debt

Having extra cash by skipping your loan payment(s) can prevent you from taking out a new loan.

You can consider getting a payday loan or other short-term loans to pay for an emergency to avoid skipping a loan payment. A loan payment relief would be the lesser of two evils.

Saves Money

A skip a loan payment is a good option if you are planning to use the extra cash to pay your high-interest debt such as a credit card debt. It is a better strategy to skip a payment on your auto loan for one month and use the money to pay off a credit card debt.

Avoid Late Payment Fees

With a skip-a-loan-service, you will not be charged late payment fees which may affect your credit score.

Skipping a loan payment can be a lifesaver when you are in a tough spot financially and can be a better loan management strategy.

How to Determine If Skipping a Loan Payment is Right for You

Before availing of a skip-a-payment service, you need to determine if skipping a loan payment is the right option.

Skipping a loan payment extends your payback time and increases the total cost of your loan because it still accrues interest.

However, if you are faced with an emergency, need some extra cash, or are in a short-term financial bind, a temporary deferment of your loan payment may help you get through a tough time.

Greater Alliance’s Commitment to Members

Greater Alliance Federal Credit Union allows its members to skip a loan payment when they need it most with no questions asked. You just need to meet the member requirement.

You can avail of the skip-a-loan service for a minimal charge of $40 for a loan payment of $600 or less and $60 for over $600 plus.

GAFCU allows you 4 skips during the life of most of these loans:

Unsecured Personal Loan
Enterprise Auto Loan
New & Used Auto Loan
Recreational Vehicle Loan
5,10,15, and 20-Year Fixed Rate Home Equity Loan

You can skip a loan payment once during the life of any First Time Auto Buyer Loan.

A member should meet these requirements to qualify for temporary loan payment relief.

A positive Savings Balance
Your loan(s) must be in good standing
You should have made the first 3 payments before applying for a skip

You can skip 2 consecutive payments and can apply to skip the next payments after 120 days.

Additionally, you must be able to fund your skip a payment using any of the following:

ACH from another financial Institution
Debit / Credit Card (with a $1.50 convenience fee)
Greater Alliance Savings or Checking

You may skip securely within our Digital Banking app (if you are enrolled) or through our Web Portal.

Maximizing the Advantages of Skip-a-Payment

A skip-a-loan service allows you some breathing space to do more with your money. It is a great way to remain ahead of your finances.

To maximize the benefits of a skip, you need to make the upcoming payments, as agreed upon with the lender, following the month(s) covered by the skip.

Maintaining a Healthy Credit Score

A high credit score – 760 and above allows you to have more financial benefits such as:

More choice of lenders
Higher credit limits
Lower interest rates
Access to more financial options
More negotiating and purchasing power

A skip a loan payment, with the permission of the lenders, means you are considered to have met your loan repayment obligation for the month(s) the skip is in effect.

Your loan will likewise not be listed as past due or that you missed payment(s), thus it will not impact your credit score.

For many people, paying a little extra for a skip-a-payment service is a better option than risking damage to your credit score. A negative credit score can make you potentially lose a lot more.

Navigating Life’s Financial Challenges with Greater Alliance

You will feel better if you are in control of your finances.

Greater Alliance, in partnership with GreenPath Financial Wellness, can help you lead a financially healthy life through financial education.

You can avail of these assistance:

Personal and family budgeting
Understanding your credit report and how to improve your score
Money management
Debt repayment
Avoiding bankruptcy, foreclosure, and repossession

Greater Alliance offers debt management services through free one-on-one financial counseling and financial education tools.

Take advantage of skip a loan payment today!

The skip-a-payment service of Greater Alliance is a valuable tool to have extra cash, protect your credit, avoid having to pay late payment fees, and apply for a new debt.

While a skip is a good loan management tool, it is important to practice responsible usage of this service.

Explore the skip a loan payment service through our Digital Banking app or Web Portal.

Skip now! Apply for a Skip-A-Loan program through digital banking or our web portal.