Listing yourself in hardship means that you are facing financial difficulties that make it difficult to meet your loan repayments in full. This could be because of illness, unemployment or changed financial circumstances. It is ultimately up to your lender to grant a hardship variation after application, which should change the terms of your loan. You may be put on partial payments, waived interest, or other variations to the discretion of your lender. Being in such a difficult financial time, it is understandable that you may have trouble keeping up with your other responsibilities, but you must also remember that it is important to keep an emergency fund on hand during this time.
Should you be saving?
Ultimately, you should be gearing all your spare money towards debts and keeping in schedule with any bills. If you are on a hardship variation for any finance taken out, you may find yourself with a small surplus at the end of your pay cycle. Instead of blowing this money on unnecessary expenditure and luxuries, you could be setting it aside with the intention of making bonus payment towards your debts. So, try saving any spare cash into a separate account to pay outstanding debts rather.
How do you manage this?
Firstly, being eligible for hardship means that you have a decrease in available funds. You should actively budget to your new income and make the appropriate changes to your lifestyle so you do not fall behind on your other financial responsibilities. Take every length to keep your debts in order and repayments up-to-date. This way you will keep the burden of damaged credit history off your shoulders, but it is the responsibility of the borrower to ensure this happens. In most cases, your lender should take the measures to assist with your situation, so don’t disregard the advice of your creditors. See if you are able to put a small amount of money away each week and you will be able to put it down on your priority debt repayments.
Hopefully, you will be back on track within a short time and able to increase your payments back to contractual amounts. Once you are on track again, you could also look to make additional bonus payments to catch up your finance and eventually return to schedule, closing the loan on the original end date. Of course, this may not be attainable on some incomes, but it is important to remember that a good credit history is exemplary in the event of refinancing or future loan applications.
Amazingly enough, saving is possible when suffering financial hardship. It may only be a small amount, but if you take the steps to return to financial stability, you may be seeing the light at the end of the tunnel. Keep it simple and don’t overcomplicate budgeting or you’ll be more inclined to give up. It’s time to get back on track.
The information contained in this blog is accurate only at the date of publication.