Skip-a-payment allows members to skip a monthly loan payment, penalty-free, during a tight financial season. A lot of financial institutions offer this option during the holidays and summer months. Let’s take a look to see if it’s a viable option for your situation.
Here’s How Skip-a-Payment Works
Depending on the financial institution, skip-a-payment is available to qualifying members year-round or during select times of the year. The program is generally only allowed for loans with terms that are 12 months or longer, have been open at least six months, and have a good payment history. Exact eligibility criteria vary by the financial institution.
Holiday Skip-a-Pay Pros
- Gives your budget some wiggle room. Skipping frees up funds for day-to-day expenses.
- Avoid late payment fees and late payments, which affect your credit score.
- Allows you to affordably pay for other expenses such as holiday shopping without using a credit card.
- Removes financial stress which makes the holidays more enjoyable.
- Skip-a-payment is also helpful if you are facing an unexpected setback where you need a little more flexibility in your budget to make ends meet.
Holiday Skip-a-Pay Cons
- Accrued interest. While skipping a payment gives you a break from making a payment, interest still accrues and is tacked on to the end of the loan term. So, you’ll ultimately be paying more in overall interest over the life of the loan.
- Extends the term of your loan (in most cases).
- Many people fall out of the habit of making their monthly payments when they choose to skip just one payment. Payment history influences credit scores the most, putting you at risk of hurting your score if you skip a payment without your lender’s permission. Be sure to make your full payments next month.
- Also, if you feel like you could use skip-a-payment every month, you may be in financial trouble. Speak to a loan representative for advice on money management, debt counseling, and budgeting tips.
After taking all of this into consideration, if you decide that taking a holiday-skip-a-pay is right for you, complete the Members Trust Skip A Pay form to request your skip today.
*$25 fee per loan skipped. To skip your December loan payment(s), the form must be returned to Members Trust no later than November 15, 2022. To skip your January loan payment(s), the form must be returned to Members Trust no later than December 15, 2022. Refer to the Skip-A-Pay application for full disclosure.