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Q: Summer always puts a big strain on my budget. There are so many extra expenses! I’ve been looking for a way to get through these months without racking up a huge credit card bill, and one option I’m considering is skip-a-payment. What do I need to know about this program?

A: Summertime brings loads of expenses that can bust any budget. There are family vacations that put a serious strain on your wallet, costly camp fees for the kids and dozens of other expenses that may not always be part of your usual financial planning.

Many people wonder how they’ll get through these months. Fortunately, Resource One Credit Union offers an exclusive break from your loan payments during this costly time of year. Now that sounds like a dream vacation!

Skip-a-payment is a program that allows members to skip a monthly loan payment during an especially tight financial season. At Resource One you can choose to skip-a-payment during the holiday season, during the summer, or just when you need the extra cash. Members can choose to skip a payment twice per rolling 12 month period with the maximum of five for the life of the loan. There is a small fee attached to the payment omission.

If you are considering skip-a-payment, speak to a member representative for full details. Additionally, here are some important points to consider before you decide to skip a payment:

Breathing Room

The primary benefit of choosing to skip a payment is quite obviously, the extra cash flow. 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 opting to skip a large payment on a loan or credit card, you’ll free up cash for your daily expenses so you don’t finish the month in the red. Summertime is so much sweeter when you’re not sweating about your bills!

Longer Loan Term

It’s important to remember that by skipping a payment, you’re lengthening the life of your loan. True, you’re skipping a payment now, but you’ll need to make that up one day. You’re essentially moving this month’s payment to the end of the loan.

Accrued Interest

While you won’t be paying your loan this month you will be billed for interest on the skipped loan. You’ll need to pay that up at the end of the loan term. This means you’ll end up paying a bit more in interest during the life of the loan.

Did you know

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 most, putting you at significant risk of hurting your score if you skip a payment without your lender’s permission. Remember: this is a one-month-only deal! Be sure to make your payments next month.

The popularity of skip-a-payment programs plunged at the turn of the millennium. They are now offered almost exclusively by credit unions, with very few banks still offering them.

If you feel like you could use skip-a-payment every month, you may be in financial trouble. Speak to a Resource One financial counselor for advice on money management, debt counseling, and budgeting tips. We’re always here to help!

Want to hit the road without worrying about bills? Call, click or stop by Resource One Credit Union today to learn about our skip-a-payment program. Take a break from your loans!

SOURCES:
http://blog.credit.com/2015/12/wait-some-banks-let-you-skip-payments-during-the-holidays-131160/
http://money.usnews.com/money/personal-finance/articles/2015/12/03/the-perils-of-skipping-loan-payments-this-holiday-season
https://www.servicecu.org/mobile.asp?MPID=819

Skip-a-Payment Disclosure
For qualified members. Member account must be in good standing to take advantage of this offer. The credit union reserves the right to determine if prior or subsequent action may disqualify your loan. Skips cannot be consecutive and new loans must have six consecutive payments made on time before taking advantage of this program. Only two skips per loan per rolling 12 month period with a maximum of five for the life of the loan. Mortgages, Home Improvement loans, Line of Credit loans, Balloon Notes and any loans with an original term greater than 72 months are exempt from the skip-a-pay program. Form must be signed in order to be accepted. By skipping your loan payment, you authorize Resource One Credit Union to defer your monthly loan payment and a $40 fee for using the skip-a-pay program will be collected as part of the deferred payment. Finance charges will continue to accrue on your unpaid balance. The skip-a-payment program will extend the final loan payment for each skip-a-payment granted on the loan. Using the skip-a-payment program does not change the original loan terms or your legal obligation to Resource One Credit Union. Restrictions may apply; see credit union for details.

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