Whether you’re facing financial hardship, catching up on bills, anticipating a major purchase, or saving for a planned vacation, wedding, or perfect holiday gift, you can use the skip-a-payment option to defer a payment on your current auto loan. This option is available through certain banks and credit unions — such as Texas Tech Credit Union — and any skipped payments will be added to the end of your loan’s term.
Most financial institutions charge a small fee of around $25 for each deferred payment. With many lenders, this deferment lasts only one month, and your regular auto loan payment will be due the following month.
The best part? This skip payment option won't incur additional fees or negatively impact your credit rating. Skip-a-payment can be helpful when facing unexpected financial emergencies or hardships, allowing you to pay for important expenses.
What is skip-a-pay, and how does it work?
Texas Tech Credit Union’s skip-a-pay program allows members to skip one monthly payment on their auto loans, so long as their accounts are in good standing and at least one consecutive payment has been made before the skipped payment date. Skip-a-pay can be used once every 12 months on eligible auto loans.
Interest continues to accrue during the extension month at the agreed-upon rate stated in the loan agreement. Skip-a-pay will extend the loan period by one month and isn’t available for lines of credit, credit card loans, or home mortgages.
Am I eligible to skip a payment on my auto loan?
To qualify for an auto loan skip payment, your account must be in good standing, and all payments must be current. Account-holders are charged $25 for each skipped payment. The skipped month will then be added to the end of your loan term, extending its length. Interest will continue to accrue on your auto loan during the skipped month.
How do I get an auto loan from a credit union?
Purchasing a new or used vehicle isn’t easy. Finding the right SUV, sedan, van, truck, or coupe to accommodate your budget and needs can be time-consuming, which is why getting an auto loan from a credit union is often the most convenient and economical choice.
Here’s how to get started:
1. Get the right information.
A credit union’s auto loan application process is much like a bank’s. When seeking an auto loan, make sure you have the following information:
- Driver's license
- Current and previous employment information
- Current and past income
- Credit score and payment history
- Auto insurance
- Home address, Social Security number, phone number, and other important personal information
2. Get preapproved.
The preapproval process isn’t required, but it can help you negotiate a lower price with a dealership or private seller.
Preapproval means that your credit score and history have been obtained to give the credit union a general idea of the maximum loan amount or interest rate for which you qualify. This can help you set a realistic budget before making a purchase. Trading in your current vehicle and making a down payment can also help reduce the total cost of the loan.
3. Understand the terms for your auto loan
Make sure to look over your auto loan terms before signing, double-checking the fees, charges, loan length, and annual percentage rate.
- Title transfer fee: A fee of $28 or $33, depending on the county.
- Sales tax: A 6.25% tax on top of the vehicle purchase, according to the Texas Department of Motor Vehicles.
- Use tax: A 6.25% use tax is applied to vehicles purchased outside Texas and brought into the state. All new or established residents who use their cars for business purposes must also pay this tax.
- Tag and license fee: The base fee is $51.75, the local fee is up to $21.50.
- Transfer registration fee: A fee of $2.50.
Learn more about auto loans
If you haven’t started the process of finding your dream car, we can help! Download our “Auto Buying Guide” and check out our blog to learn more about loans, current rates, and more. Have questions? Visit our support center or schedule an appointment with one of our advisors.