What happens if you can't afford the balloon payment at the end of the loan?

H

Hank Rogers

Member
Car loans that require you to make a balloon payment at the end of the loan have both a good and a bad part.
The good part is: lower monthly payment. Which is great!
The bad part is: you need to come up with a large sum of money by the end of the loan's term!

What happens if you cannot make the balloon payment? Has anyone ever been in such a situation before?
 
Are you in this particular situation yourself? Because, you can risk having your vehicle repossessed. However, the details of what happens if the balloon payment isn't made should be clearly written in your contract!
In any case, my co-worker was in a similar situation, she risked losing her car so, to avoid trouble, she simply re-financed the loan. It wasn't the smartest thing to do, but at least she has wheels!
 
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