Having a car has become a necessity these days, but coming up with the funds to cover the price tag on a vehicle can be tough without the help of a car loan.
BMO is among the many big banks that offer car loans, but part of the deal is that you’ll need to make your regular installment payments on time each billing period.
But despite your best efforts, you may miss a car payment or two, especially if you come upon hard financial times. The question is, what will happen if you fail to make a car payment to BMO on time?
Let’s dig in a little deeper to find out.
What Happens If You Missed A Car Loan Payment With BMO?
The outcome of missing a car payment with BMO depends on how long overdue your car payment is:
BMO Car Loan Payments That Are Less Than 30 Days Late
If you’re late on your car payment by less than 30 days since its due date, you’ll likely hear from BMO by email, phone or mail reminding you of your payment. You may also be charged a late payment penalty fee.
However, it’s also possible that you may have a grace period as part of your loan contract, which means you’ll have a few extra days to come up with the payment after you’ve missed the official due date without penalty. But, you may be slapped with late payment penalty fees once this grace period expires.
Do note, that whether your BMO car loan payment is considered late or missed depends on how BMO defines it on your loan contract.
BMO Car Loan Payments That Are More Than 30 Days Late
If your missed payment is more than 30 days past due, the consequences could be much more severe than a simple late payment penalty, depending on how long your BMO car loan payment is overdue.
Credit Score Impact
Payments that are over 30 days late are typically reported to the credit bureaus. When this happens, they’ll make a note on your credit report that your payment has been missed, which can have a negative impact on your credit scores.
Car Repossession
Since your car collateralizes your auto loan, BMO has the right to repossess it if you fail to make your car loan payments on time. Lenders place liens on cars until the loan is fully repaid, which means you don’t technically own your vehicle until the loan is paid off in full. As such, if you continue to miss your car loan payments, BMO can repossess your car.
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READ ARTICLEWhat Car Loan Payment Relief Options Does BMO Offer?
If you’re having trouble keeping up with your car loan payments, BMO may offer some options to provide you with some financial relief so you don’t default on your car loan:
BMO Car Loan Payment Deferral
If you’re concerned that you might miss your car loan payment, BMO allows borrowers to defer up to 2 car loan payments per year. This is a good option if your missed payment is just a one-time financial hiccup.
Keep in mind, however, that you’ll eventually need to make up for the payment. Further, interest will continue to accrue, so you may wind up paying a little more overall.
BMO Car Loan Modification
Those who still need some financial help after their deferral period ends may still find some financial relief from BMO. If you’re still having trouble keeping up with your car loan payments, speak with a representative from BMO to see if they’ll be willing to work out an arrangement to modify your current loan contract that will fit better within your current budget.
| Phone | 1-877-225-5266 |
| In-Person | Find A Branch Near You |
| You can message a BMO representative with any questions you may have by signing into your online BMO account under “my messages” |
Want To Lower Your Car Payments?
Speak with a Loans Canada representative today and learn how you can refinance your car loan and save. Call us today at 1-877-995-6269 or click here.
Note: Program is currently not offered in Quebec.
Can You Refinance Your Car Loan At BMO?
Refinancing a car loan means taking out a new loan with different terms and paying off your existing loan. Essentially, you’re replacing your old car loan with a new one, ideally with a lower interest rate to help you save money. You may also choose to extend the loan term to give you more time to pay off the loan, which may help reduce your monthly payments. You can use a car loan calculator to better asses how much car you can afford based on various loan terms.
It’s possible that BMO may allow you to refinance your car loan, however, you’ll need to speak to a customer representative. If BMO agrees, that means BMO will buy your outstanding debt, then offer you a completely new car loan contract that you will be bound to.
Benefits Of BMO Car Financing
There are several perks to using BMO to take out an auto loan, including the following:
- Competitive rates. If you have a relatively strong financial and credit profile, you can secure a competitive car loan interest rate with BMO.
- Flexible payment schedules. Customize your car loan payment schedule by choosing from weekly, bi-weekly, semi-monthly, or monthly payment options.
- Flexible loan term options. Loan terms range from 3 to 8 years.
- Option to skip payments. You can defer a payment or two per year if necessary.
- Choice between fixed- and variable-rate loan options. Depending on what interest rates are doing today, your appetite for risk, and your budget preferences, you can choose between fixed- or variable-rate car loans.
- No early repayment penalty fees. If you’re able to pay your car loan off early before the term expires, BMO won’t charge any prepayment penalty fees.
BMO Car Financing Overview
BMO’s car loan program is offered through car dealerships. When you purchase a vehicle, your dealer will verify your eligibility for a car loan. Both new and used vehicles can be financed with a BMO auto loan.
BMO’s auto loans can be summarized as follows:
- Minimum loan amount of $7,500, with no specified maximum
- Loan terms up to 96 months
- Fixed- or variable-rate options are available. Average car loan interest rates range between 6% to 8%.
- Deferrals are available up to twice per year
How Do I Apply For A BMO Car Loan?
Before you apply for a BMO car loan, take some time to compare lenders and rates to make sure you’re getting the best deal. Here are 5 simple steps to apply for a BMO car loan:
- Find A BMO Car Dealership – You need to apply for a BMO car loan directly through the dealership. BMO does not offer an option to apply directly with them via their website.
- Choose A Car – When you visit a dealership and decide on the vehicle you want to buy, let the dealer know that you are interested in a BMO auto loan. The dealership and BMO will work together to process your loan application.
- Gather Your Documents – You’ll need to provide the BMO car dealer with a few documents to support your loan application, including the following:
- Government-issued photo identification
- Proof of employment and income (ie. pay stubs, bank statements, or tax slips)
- Apply – BMO will assess your application and creditworthiness before approving you for a car loan, as well as what interest rate to charge you.
- Get Funded – When your loan application is finalized, BMO will provide the funds needed to cover the cost of the vehicle you’re buying.
BMO Car Loans FAQs
Can I make additional payments to my BMO car loan?
Can I get a BMO car loan with bad credit?
Can I change my BMO auto loan due date?
Final Thoughts
If your financial situation hits a snag that makes it very difficult for you to make your BMO car loan payments on time, your best bet is to get in touch with BMO right away. Communicate your troubles with BMO and work out an arrangement that will prevent you from defaulting on your car loan. If you miss your car loan payments, you could face serious repercussions if you don’t make good on what you owe.
