Question:
Dear Steve,
I have a $10,000 loan with one main financial that I have had for several years. Yes, I know their interest rate is awful, but I had no choice at the time.
In the past six months I’ve become one month behind in my payments of $340 a month. I want to catch up because I realize that most of my payment each month goes just to the interest, but each month something more pressing comes up, and I just cannot catch up. I have an injury which prevents me from working right now, so my income is fixed. I will be eligible for Social Security soon at age 62, so I hope to catch up with in the next 6 to 7 months. In the meantime, I pay one payment each month on either the 30th, the 31st, or the 1st, usually the first of each month.
I do not want to become TWO months behind. I am widowed, on a pension and have no additional money to catch up on this loan right now. Every month they bombard me with phone calls from about the fifth of the month until I pay at the end of the month or on the first of the next month. ( I am never more than 30 to 33 days late.)
They even called my 83 year old mother recently, which was the last straw for me. (They called her even though I had called them earlier in the month to tell them how much and when I would pay, so I was never ignoring their requests for information from me.
I do stay in contact with them, I just do not answer their calls three times a day, each and every day.) Recently, the woman at one main financial has said that I need to move this payment that I am one month behind on each month to the end of the loan so that I’m not paying so much interest each month…AND she has been really adamant about me doing so. Calls me all the time about this.
She stated that their office has to close out the books, or something like that, by the end of the month, and she suggested I write a check on the last day of the month so they could close out their books. I said my money would not be deposited in the bank until the next day on the 1st, but she assured me that my check would not go through until the next day. What?
Recently, as you probably already know, one main financial has been bought out by Springleaf Financial, so I was very concerned that my loan might be rewritten with Springleaf or that it might be rewritten with new terms in order to move the missed payment to the back end of the loan.
The story gets even more weird and nasty. At the beginning of last month, when I phoned One Main’s office to pay my payment ( which is one month behind—approximately 30 days late), the woman who answered the phone basically said they would NOT take any more payments from me until I came in and made arrangements to, or actually signed the paperwork to, move this missed payment to the end of the loan. What?!
I asked to speak to the manager and she finally agreed to take my payment but stated firmly that I need to come in next week to do this. I am very concerned with how this will affect the interest on my loan. I have no adverse history with them at all other than this, and I own my own home even though I have a lot of smaller debt. My home and property is paid for and I own my own car which is only 4 years old. I live in a rural area and must have a car to get to the doctor and grocery store, etc.
I pay all my other loans on time other than an occasional 30 day late payment which I catch up immediately. I find at One Main Financial, they talk in circles, they never give you a straight answer, they make vague threats that could adversely affect my life and make my credit even worse, and they upset and confused my elderly mother. My daughter just went into premature labor this week, so I’m not going in to see them this week about moving the missed loan payment, but I get sick to my stomach each time I think about calling them.
It’s even beginning to affect my sleep at night. I cannot remember ever being treated this badly. What should I do? And how will this “movement of the late payment to the end of the loan” affect my interest rate with them?
Debbie
Answer:
Dear Debbie,
Thank you for contacting me for help.
What we have here is a few different situations. Primarily you have the issue surrounding how the situation is making you feel. The actions of the company are making you stressed, nervous, and on edge. That’s normal and understandable.
Next we have the actions of the local staff at the One Main Financial Office. They are making you feel as if they are not helping you and/or talking in circles.
Finally, we have the issue surrounding the loan and month-to-month finances.
The staff at the local One Main Financial office are better being your friend and wanting to help you than your adversary. I would suggest being polite to them and cooperating with them to move solutions forward. The local staff isn’t trying to make just your life difficult, they are trying to keep their job by doing what their bosses and the corporate leaders want them to do. They are the messengers, not the decision makers.
Whatever happens here the primary place to turn to decipher what will or may happen is going to be the contract or agreement you signed when you took out the loan. Nearly all the lending contracts I review are very clear about what happens when you are late, default, or fail to pay. The agreements describe when they can take legal action and what fees and penalties may be charged.
If you roll the one payment on the back of the loan then at least you won’t be so delinquent anymore that the loan may roll out of their office. That motivates the local office but it’s also better for you since your loan is managed locally rather than in corporate collections or assigned to an attorney.
As far as them calling you too often, you could speak to an attorney who is licensed in your state to see if this constitutes harassment but the Fair Debt Collection Protection Act regulations would not apply here since these are not third-party collections.
Being 30 days late seems to be more of a pattern in your finances than the history of this one loan. I would not be surprised if you did not take out this loan to get caught up on other bills. If so, loans like that will eventually sink your financial ship because you can never get caught up.
I don’t know what state you live in but given the equity in your home it would first make sense to try to make the people at One Main Financial your friends to enlist their assistance to make this situation better. If they propose the payment rollover then ask them what fees or penalties you may incur. The advantage of the payment rollover is it helps you get more current. The disadvantage is it might be expensive. But isn’t the current reality that you aren’t able to catch up so some solution to get you caught up and stay current is worth some expense.
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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by thePersonal Finance Syndication Network.