A smart way to make sure you never miss a payment and aren’t late paying your monthly bill is to set up monthly automatic payments. There are several ways to do this. You can schedule a recurring electronic debit by providing your lender with your bank routing and account information or your debit card information, and your lender will withdraw the funds monthly from your checking account. You may be able to provide your lender with a credit card, so you can charge your monthly payments to your card while simultaneously accumulating cash back, travel rewards and other perks. Or, you can set up a recurring payment to your lender through the online bill pay service your bank or credit union offers.
You can make payments before they’re due or pay more than the amount due each month. To pay off your loan faster, make sure your lender knows the extra funds shouldn’t be applied to future payments. You can cancel automatic payments or change the payment amount or payment date by contacting your lender or changing your scheduled bill payment request online.
When you set up automatic payments, it’s important to make sure you have the funds in your account each month to cover the withdrawal on the payment date. Otherwise, you could overdraw your account and incur overdraft and late payment fees. If you’re paying with your credit card, make sure you pay off your balance each month to avoid interest charges on top of the interest you’re paying on your loan.
Lenders typically report late payments to credit bureaus when you’re 30 days past due on a payment, and you may be assessed late payment fees.
Being late for any payment—mortgage, car loan, student loan or credit card—can negatively affect your credit score. If circumstances arise and you’re financially unable to make a payment, you should reach out to your lender. You may be able to set up a different repayment plan, request a forbearance where payments are temporarily stopped or have late payment fees waived.
Lenders typically report late payments to credit bureaus when you’re 30 days past due.
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