How to Request a Loan Extension

Requesting a loan extension on your home mortgage or auto loan may be a way to stay afloat during tough economic times. Understand that this is a last resort option for many people. When you Request a loan extension you are only buying financial relief for a short period of time. It is recommended that you only consider this option if your financial situation requires quick and immediate action.

Instructions

1. 

   Understand the implications when you request a loan extension on your auto financing.

   Typically, requesting a payment extension for your car loan will be easier to obtain than for a mortgage. When you request a loan extension for your auto loan, you will be able to save money during that particular payment period. However, don't think that when you request the loan extension that you will have no payment. Often you will still be required to pay the interest amount. The only portion that is deferred is the principal on the loan.

   Also, be aware that the extra month will be tacked onto the end of your loan

2. Contact your lender and ask for information concerning a loan extension. Be open and honest with your lender. The more information they have pertaining to your financial situation, the more likely they will be to help you. Lenders want to you to be able to pay your loan. They are often willing to help.

   Be sure you ask questions in order to understand the implications of your request for the loan extension. Find out how your credit score will be affected by skipping a payment. Ask if there are any penalties or other fees. Gather as much information as possible so that you can make an educated decision prior to formally requesting the loan extension.

   There is typically a form you will be required to complete in order to request the loan extension.

3. 

   When you request a loan extension for your mortgage, there likely will be more hurdles involved. However, many banks have programs set up to address your request.

   When calling your mortgage company, ask to speak with the loss mitigation department. These employees are trained to deal with your situation.

   As part of your request for a loan extension, you likely will have to fill out hardship documents explaining your specific situation. Again, be open and honest with the lender. It is in both parties best interests to find a solution.

4. 

   Keep a notepad next to you when making these calls to discuss the loan extension. Take good notes as the conversation progresses. Then follow all verbal conversations concerning your request for a loan extension in writing. Your letter should outline exactly what was discussed and the terms of any agreements. Written doocumenation will help protect your rights in any future disputes. Be sure to obtain the name of each person you speak with. Include the date, subject matter, and person you spoke with in your follow up letter.