Summer expenses can bust any budget. Taking advantage of a skip-a-payment program can give you more breathing room during this expensive time of year.
Skip-a-payment programs allow members to skip a monthly loan or credit card payment during the year – usually during especially tight financial seasons like the holidays and summertime.
Typically skip-a-payment is available on most loans, though some lenders only allow it for consumer loans and auto loans, but not for credit cards, lines of credit, or first mortgages.
To be eligible, most require you are up to date on your loan payments, and you may need to have sufficient funds in your checking account to cover the associated skip-a-payment fee if applicable.
Here are some important points to consider before you decide to skip a payment:
1. Breathing room
During an expensive time of year, you might not make it through the month without resorting to swiping your credit card – and paying high interest on every purchase you make.
By skipping a large bill payment, you’ll free up some cash for your daily expenses so that you don’t finish the month in the red.
2. Longer loan term
Skipping a payment means lengthening the life of your loan. You are essentially moving this month’s payment to the end of the loan.
3. Accrued interest
While you won’t be racking up credit card bills with high interest rates this month, you will be billed for interest on the skipped payment. You’ll need to pay that up at the end of the loan term.
If you do take advantage of skip-a-payment, remember it’s a one-month-only deal! Many people fall out of the habit of making their monthly payments when they choose to skip just one payment. Be sure to make your payments the next month.
Arizona Federal Credit Union members can skip a loan payment once a year (anytime) on qualifying loans. It’s easy. Just log in to your online account or the mobile app to see if you’re eligible. In online banking, click Additional Services > Skip a Payment. In the mobile app, tap “More” (iOS/Apple) or the menu bar (Andriod) to find the skip-a-payment link.