The Impact of Extending Your Loan Term

Extending your loan’s term can provide more time to pay off a debt or lower your monthly payment. However, it’s important to understand that this option isn’t always available and can lead to paying more interest over the life of the loan. Here are some key impacts of extending your loan term:

• Move skipped payments to the end of your term: With lender approval, you may be able to skip a few payments and move them to the end of your loan’s term without changing your monthly payments.
• Decrease your monthly payment: Extending the term without skipping payments can lower your monthly payment by spreading the repayment over a longer period.
• Increase in interest paid: Interest may continue to accrue during skipped payments and the extension period, leading to higher overall interest payments.

When to Consider Extending Your Loan Term

Extending your loan’s term isn’t always a straightforward decision and requires qualification. Here are some scenarios where you might consider this option:

• Sudden financial changes: If you or your partner lose a job, face unexpected medical bills, or are affected by a natural disaster, extending your loan term can provide financial relief.
• Freeing up monthly budget: Refinancing with a longer-term loan can lower your monthly payment, giving you more money for other expenses.
• Lower interest rate: If you can refinance with a lower interest rate, you might extend your loan term and lower your monthly payment without increasing the overall payment amount.

Alternatives to Extending Your Loan Term

If extending your loan term isn’t an option, consider these alternatives to manage your finances:

• Go bare-bones on your budget: Cut back on unnecessary expenses until your finances improve.
• Find a quick side hustle: Look for side jobs that can increase your income. Many options require minimal training and can be started quickly.
• Seek financial assistance: Government and nonprofit programs may help lower or cover some of your bills. Call the 211 hotline for assistance options in your area.
• Open a new loan or credit line: Consider an emergency loan or a new credit card with an introductory 0% APR offer to cover expenses.
• Borrow from family or friends: While not always easy, borrowing from loved ones can be a cost-effective option. Be mindful of the potential impact on your relationship if you can’t repay the loan.

Check Your Credit and Loan Offers

Your credit history and scores can impact your eligibility for refinancing or new credit accounts. Regularly check your credit report and FICO® Score to stay informed and get matched with the best loan offers based on your credit profile.

Contact O1ne Mortgage for Expert Mortgage Services

At O1ne Mortgage, we understand the complexities of managing loans and finances. Whether you’re considering extending your loan term, refinancing, or exploring other financial options, our team of experts is here to help. Call us today at 213-732-3074 for personalized mortgage services and advice tailored to your needs.