A notice of default is a formal letter that a borrower receives when they have failed to make payments on their car loan. This notice outlines the specific terms of the agreement and the actions that will be taken if the borrower does not resolve the situation.
The notice typically follows a number of warnings and payment reminders. Receiving a notice of default is a serious matter that requires attention in order to avoid potential car repossession.
The letter officially starts the process of ending your agreement due to breaching the terms and conditions.
A notice of default will include the following information:
Once you have read the details provided within the notice of default you should contact us.
Clearing the arrears in full by the date specified in the Notice of Default means no further action will be taken.
It is vital to contact us as soon as possible to discuss your agreement. There may be options available to work out a repayment plan to help you get back on your feet.
Finally, if needed you must seek help. If you are experiencing financial hardship, it’s important to know there is free, independent help and support available to you.
There are plenty of debt charities and advice organisations that will be able to provide you with recommendations on getting out of financial difficulty. Explore organisations such as Citizens Advice or StepChange.
If you fail to make payment on your vehicle, then your car may be at risk of being repossessed.
If you miss payments and receive a notice of default, we will provide you with a period to catch up on the payments. If you still fail to make the required payments, we may issue you with a Notice of Termination, which may result in us proceeding with repossession. Repossession has serious consequences for your credit score, and financial stability, as well as resulting in the loss of your vehicle. It’s important to keep communicating and try to work out a payment plan if you are having difficulty making payments.