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Can a Bank Rescind on a Disbursed Loan? - The Bills.com Blog
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Can a Bank Rescind on a Disbursed Loan?
Friday, May 16, 2008
Question: Hi Bill, I have an auto loan as the begining of April 2008 and put $3000.00 as a DP. I had a job when I got the loan and lost it a week after and was laid off from the one previous and I am collecting unemployment presently. My question is can the bank recind the auto loan becuase I am unemployed? I can afford the payments even though I am unemployed.
Answer: Many contracts contain a clause that states the creditor can declare a loan in default if it believes, in good faith, that the borrower will not be able to make its future loan payments. However, I have never actually seen a lender declare a loan in default just because a borrower loses his job; the creditor has no incentive to repossess a vehicle as long as the borrower is making the regular monthly car payments. Your lender will almost certainly not care how you are making your payments,
simply that they are being made. As long as you can afford your payments, I do not think you need to worry about the lender trying to repossess your vehicle.
Since you have lost your job, you may wish to contact your lender to explain the situation and let them know that you will be able to continue making your monthly payments. This action on your part should prevent any future conflict with your lender about your withholding information regarding your ability to repay the loan. Communicating with your lender is
Since you have lost your job, you may wish to contact your lender to explain the situation and let them know that you will be able to continue making your monthly payments. This action on your part should prevent any future conflict with your lender about your withholding information regarding your ability to repay the loan. Communicating with your lender is
not required, nor is it something that most people would do, but if you are concerned about the lender finding out that you lost your job, it would probably be better for that information to come from you along with a commitment to keep making your payments.
For more information about auto loans, I encourage you to visit the Bills.com Auto Loans page.
I wish you the best of luck in your search for new employment, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog
For more information about auto loans, I encourage you to visit the Bills.com Auto Loans page.
I wish you the best of luck in your search for new employment, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Ana on Friday 10th October 2008 14:19
Can the bank declare my home equity loan due even if I am making all my payments on time, for it and for my main mortgage. I am not delinquent on any of my bills.
2. Posted by Bill on Sunday 12th October 2008 10:31
No, they cannot. This is only done when the payments are due by 30 days or more. If you are dealing with such a situation, you should dispute the same with the bank and as well as the credit bureaus. The FTC provides a free guide to dispute credit report errors here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm