Why do banks decline to restructure vehicle contracts when one struggles to pay?
Answers:
probably because the car is worth less than the amount you owe on it - as you are a high risk they will force you to continue paying the agreed rate to recover as much of the loan as possible before you default - when you default they take the car away and sell it at auction and get back some money.
if they see you as a risk and lower your payments and you still default then they get less money overall from you and lose out which is why they dont do that. they want their money back and by lowering your contributions they are not helping themselves.
you may be better getting an unsecured loan over a longer period to pay the vehicle finance off with, this will lower the payments and free yourself from having debt against the car so if you default the car is still yours.
TIP - never get a secured loan - if you get into trouble they will take it away from you and still try to recover money after that - if its an unsecured loan what can they do other than tarnish you credit rating? you will get a better interest rate on an unsecured loan also.
So they can make extra charges when you fail to keep up with the payment
When you and the bank made the initial agreement, it was they would provide you x amount of money to purchase x vehicle, at x interst rate with a payment of x for x months.
Sounds like the bank has lived up to all of its agreements, and you are not, or are contemplating not living up to your promise (defaulting). So why should the bank change their agreement? They havent done anything incorrectly. As part of that agreement, you also agreed to give up ownership of the vehicle if you defaulted. They have no reason to change their agreement with you.
the individual is considered to great a risk of defaulting on the loan if they can't handle the original payment plan. which the borrower agreed to and assured them that they could repay as planned without complications. It ain't personal just business! Reaper out....
The value of the vehicle has depreciated to trade in status.
In other words the value is alot lower than what is owed.
Unlike realestate which always increases in value.
B/C if you do it for one person the option must be open to everyone. Banks don't care if you default or not. It's your credit that is on the line. Banks need a large amount of unpaid loans as tax write offs. Then they write off the bad debt, turn your account over to a collection agency and you get hassled forever. It's a bad system for the consumer and is never based on a personal level.
you havent held up your end of the bargain you signed a contract agreeing to certain terms, they dont have to restructor the contract but it would help if they did.
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