A car payment can become difficult to manage after a job loss, reduced income, unexpected medical expenses, family emergency, or other financial setback. Falling behind can lead to late fees, credit problems, and potentially vehicle repossession.
If you are struggling with an auto loan, contacting your lender or loan servicer as soon as possible is one of the first steps to take. Depending on the lender and your circumstances, options may include changing your payment date, creating a payment plan, temporarily pausing payments, or refinancing.
There is no general federal program that simply pays everyone's monthly car loan. However, government benefit programs, local assistance, and hardship resources may help with other household expenses, potentially making it easier to keep up with transportation costs.
Who May Need Help With Car Payments?
You may be looking for assistance if you:
- Have lost a job or experienced reduced income
- Are behind on your auto loan
- Are facing an unexpected financial emergency
- Have experienced a major medical expense
- Are struggling with several household bills
- Need your vehicle to get to work
- Need transportation for medical appointments
- Are at risk of vehicle repossession
- Have experienced a natural disaster
- Have a loan payment that has become unaffordable
Check What You May Qualify For
If your car payment is putting pressure on your household budget, checking for other financial assistance may help free up money for transportation and other essential expenses.
- ✓ Free eligibility check
- ✓ Free guidance if needed
Available programs vary based on your eligibility, location, and household circumstances.
Ways to Get Help With Car Payments
Contact Your Auto Lender
If you know you will have trouble making a payment, contact the lender or servicer before missing it. Depending on the lender, options may include changing your payment due date, creating a payment plan, temporarily postponing payments, forbearance, extending the loan term, or other hardship arrangements. The Consumer Financial Protection Bureau recommends contacting the lender as soon as possible and getting any new agreement in writing.
Ask About Payment Extensions
Some lenders allow borrowers experiencing hardship to temporarily postpone one or more payments. A payment extension does not necessarily erase what you owe. Interest may continue to accumulate, and the missed payments may be added later in the loan. Ask the lender how the arrangement will affect the total cost and future payments.
Ask About a Different Payment Date
If your payment is due before you receive your paycheck or benefit payment, your lender may allow you to change the due date. This can sometimes make budgeting easier without changing the total amount owed.
Consider Refinancing
Refinancing replaces your existing auto loan with another loan. Depending on your credit, income, vehicle, interest rate, and other factors, refinancing could potentially lower the monthly payment. However, extending the loan term can increase the total amount of interest paid over time.
Look for Other Financial Assistance
Government assistance may not directly pay your car loan, but programs for food, housing, utilities, healthcare, childcare, and other necessities may reduce pressure on your overall budget. Benefit finders often include categories such as children and families, disabilities, food, health, housing and utilities, jobs and unemployment, and welfare or cash assistance.
Disaster-Related Assistance
If a federally declared disaster has affected your ability to make your auto loan payment, contact your lender and ask whether it has a disaster hardship or forbearance program. Federal guidance specifically recommends contacting the auto lender when a disaster affects your ability to make payments.
What About Car Payment Assistance Programs?
Some nonprofit organizations, community organizations, and local programs may provide transportation assistance or emergency financial support. However, availability varies considerably by location. Assistance may sometimes take forms other than direct car-payment help, such as:
- Transportation vouchers
- Gas assistance
- Emergency transportation
- Employment transportation programs
- Help with other household expenses
- Local hardship assistance
Because programs change and funding can be limited, check current eligibility before relying on a particular program.
How Car Payment Assistance Typically Works
- Contact your lender. Explain your financial hardship before the account becomes seriously delinquent.
- Ask about hardship options. Find out about payment extensions, due-date changes, or payment plans.
- Review the cost. Ask whether interest, fees, or additional payments will result.
- Get agreements in writing. Keep documentation of any changes to your loan.
- Check other assistance. Look for programs that can reduce your food, housing, utility, healthcare, or other expenses.
- Create a transportation budget. Consider the loan payment, insurance, fuel, repairs, and other vehicle expenses together.