Repossession occurs when you default on your loan and the lender takes back the asset secured in the agreement.
If you have an asset repossessed, it will be noted on your Credit File and this can often make it harder to get accepted for finance in the future.
Yes. If you’re no longer able to maintain your Monthly Payments and there is nothing more the finance company can do to resolve the situation, the lender has the legal right to take back your car.
But most lenders will only take this action as a very last resort.
If you default on your loan but you’ve repaid over half the amount owed, you have legal rights to the vehicle, and it cannot be repossessed by the lender.
However, you still owe the outstanding finance and if you’re unable to repay the amount owed the default will be recorded on your credit file.
1. Talk to your finance provider
If you’re struggling to maintain your monthly repayments, you should speak to your lender and be honest about your situation, as most lenders will be happy to work with you to resolve the matter.
This may involve setting up a debt management plan, whereby your monthly payments are temporarily reduced to a rate you can afford.
Alternatively, you may be able to refinance your car to make your payments more manageable. This could mean paying less each month but over a longer period.
2. Choose responsibly
Choosing a responsible lender is key. As a responsible lender, Creditplus will always perform a Soft Credit Search to check your affordability.
But whilst lenders have a legal obligation to ensure your loan is affordable at the outset of the agreement, unexpected changes in circumstances can happen later on.
If your circumstances do change and you’re unable to maintain your payments in the short-term, Creditplus will work with you to agree flexible payment options to help you get back on track.
Check your eligibility today without affecting your credit score and receive an instant decision.