Lenders Deferring Payments

[Deleted]

I just saw a video on FB of a celebrity advising people to take their lenders up on offers to defer payments during this crisis. She’s an entertainer that made good choices with her money when her group was really popular back in the 90’s, a multi-millionaire with several streams of income besides her music career.

She said she’s called and had the payments on the car she leases for her daughter deferred for 2 months. 

I understand what she was saying about holding on to whatever money you can right now, because we don’t know what’s coming and what you may need that money for. I’m also relieved that lenders are doing this, because I know so many people have already lost jobs and income, and still others have reason to believe that job and income loss is likely in their near future. I believe our local utility company has agreed to suspend cut-offs because of nonpayment, and I think that’s a wonderful gesture for the people who need it right now. I absolutely agree that people in those situations should explore their options to try to hang on to whatever money they have right now, for as long as they can.

But I’m not sure that’s good advice for EVERYONE. Like even the wealthy? Some people have jobs that really are essential, coupled with health insurance that would cover a lot of the costs if they get ill (ignoring for a minute the potentially devastating economic fallout from getting seriously ill from COVID 19). Is that good advice for them also? What about people who have very healthy EF’s AND truly essential jobs and health insurance? Should they defer payments on their homes and vehicles or whatever now too, just because they can?

Maybe I’m missing something, but even though I’m far, far from wealthy, I can survive without income for a minute, and if my job disappears solely because of this current crisis, that would mean we all have much bigger problems than missing a loan payment, so I’m still paying my bills on time and plan to continue doing so. DBF is doing the same. 

I didn’t watch the whole video, but since she’d already spoken of the loan payments she’s set up to be deferred, I ASSume she continued on as if this was good advice for everyone.

What do you all think? Please tell me if I’m missing something.

[wvugurl26]

I'm not deferring payments on anything. My agency's funding is secure. We can and are working from home 100%.

If are out of a job then it makes sense. I don't know why you would do it just because you could. You will owe the money at some point.

I might try to come up with extra towards my student loan while interest is 0%. My interest rate was fixed at 6.8% and these are federal, not private loans.

[TheOtherMe]

My pension is as secure at wvugurl26 's agency.  I'm not deferring anything.  

My income is the same as it was before this so why would I defer payments?

[Deleted]

Mar 27, 2020 18:35:54 GMT -5 TheOtherMe said:

My pension is as secure at wvugurl26 's agency.  I'm not deferring anything.  

My income is the same as it was before this so why would I defer payments?

Yes, this is me.  As a retired person with a pension and SS, my income hasn't changed.  I don't need to defer my payments or even collect a stimulus check.

That doesn't mean I won't collect the check, though.  I will be helping to pay it back so I might as well.

[Deleted]

Mar 27, 2020 18:35:54 GMT -5 TheOtherMe said:

My pension is as secure at wvugurl26 's agency.  I'm not deferring anything.  

My income is the same as it was before this so why would I defer payments?

That’s what I was thinking and wondering as I watched the video. It really seemed odd coming from a multi millionaire that’s saying she has deferred payments herself and advising everyone else to do the same.

[giramomma]

Mar 27, 2020 18:59:58 GMT -5 @pinkcshmere said:

Mar 27, 2020 18:35:54 GMT -5 TheOtherMe said:

My pension is as secure at wvugurl26 's agency.  I'm not deferring anything.  

My income is the same as it was before this so why would I defer payments?

That’s what I was thinking and wondering as I watched the video. It really seemed odd coming from a multi millionaire that’s saying she has deferred payments herself and advising everyone else to do the same.

Maybe she wants to hold onto cash so she doesn't have to sell in a down market.

We have family that are worth a few million. When the market is down, I can bet they aren't selling off assets, rather cutting back, to keep cash on hand.

[NoNamePerson]

You lost me at “celebrity on FB”. 

[Deleted]

Mar 27, 2020 19:25:50 GMT -5 NoNamePerson said:

You lost me at “celebrity on FB”. 

Right! Not exactly someone to necessarily take financial advice from. 

But I think a lot of people that follow her on FB know that she’s about her money and used the money she made at the height of her career, to make more money for her and she has her hand in several pots so she’ll have income even if she never gets another dime in royalties or publicly sings another song. And knowing that, they’re probably inclined to take her advice to heart.

 I only saw the video because one of my friends IRL shared it and tagged some of her relatives, trying to spread the word, I guess.

[bobosensei]

Clark Howard, a consumer advocate local to my state, answered a listener question about deferred student loan interest.  He was saying that if you continue to pay that you don't get the benefit of the "interest holiday" but that it was possible later on that someone would decide that those who continued to pay would get a credit on the interest that accrued.  I don't have student loans so I have not paid attention to the particulars.  Still doesn't make sense to me as aren't you just in exactly the same place 60 days down the road?  So only benefit is if you needed to try to hoard cash.

My boyfriend's credit union sent him word a few weeks ago that he could defer his car payment.  Wells Fargo has not done the same for me.  Besides my mortgage it is my only loan.  My job is not going anywhere yet because of coronavirus.  But considering our main clients are hospitals and this could impact sales, there may be issues if this drags on too long.  I still have a job to do and current clients to support and provide new features to, but some of the projects that were supposed to start have been cancelled or placed on hold.

[Deleted]

The banks and credit unions are taking a hit to do this, so no, I'm not deferring anything unless I need to. But, I can't understand being a multi millionaire and carrying consumer debt anyhow.

[giramomma]

Mar 28, 2020 7:42:08 GMT -5 minnesotapaintlady said:

The banks and credit unions are taking a hit to do this, so no, I'm not deferring anything unless I need to. But, I can't understand being a multi millionaire and carrying consumer debt anyhow.

I think this is where the Philification comes in.

My family has at least one car loan, at 0%. It's a modest car, but they still want that 20K-25K or so to work for them in the market. 

[Deleted]

It's just not for me. I'll just buy a car and be done with it. I have 4K on a 0% credit card right now and its driving me bonkers. I'm paying way over the minimum.

[tskeeter]

Mar 27, 2020 17:59:50 GMT -5 @pinkcshmere said:

I just saw a video on FB of a celebrity advising people to take their lenders up on offers to defer payments during this crisis. She’s an entertainer that made good choices with her money when her group was really popular back in the 90’s, a multi-millionaire with several streams of income besides her music career.

She said she’s called and had the payments on the car she leases for her daughter deferred for 2 months. 

I understand what she was saying about holding on to whatever money you can right now, because we don’t know what’s coming and what you may need that money for. I’m also relieved that lenders are doing this, because I know so many people have already lost jobs and income, and still others have reason to believe that job and income loss is likely in their near future. I believe our local utility company has agreed to suspend cut-offs because of nonpayment, and I think that’s a wonderful gesture for the people who need it right now. I absolutely agree that people in those situations should explore their options to try to hang on to whatever money they have right now, for as long as they can.

But I’m not sure that’s good advice for EVERYONE. Like even the wealthy? Some people have jobs that really are essential, coupled with health insurance that would cover a lot of the costs if they get ill (ignoring for a minute the potentially devastating economic fallout from getting seriously ill from COVID 19). Is that good advice for them also? What about people who have very healthy EF’s AND truly essential jobs and health insurance? Should they defer payments on their homes and vehicles or whatever now too, just because they can?

Maybe I’m missing something, but even though I’m far, far from wealthy, I can survive without income for a minute, and if my job disappears solely because of this current crisis, that would mean we all have much bigger problems than missing a loan payment, so I’m still paying my bills on time and plan to continue doing so. DBF is doing the same. 

I didn’t watch the whole video, but since she’d already spoken of the loan payments she’s set up to be deferred, I ASSume she continued on as if this was good advice for everyone.

What do you all think? Please tell me if I’m missing something.

In most cases, Deferring payments does not stop the interest on the loan from accruing.  The lender just adds the unpaid interest to the loan principle.  (That’s how $20K of deferred student loans becomes more than $100K of student loans).  Not only does the lender collect an additional two months of interest over the life of the loan, but they also collect interest on the two months of unpaid interest for the remainder of the loan.  No way that the lender loses here.

[justme]

I saw articles that said mortgage companies that defer it are requiring full payment of missed payments at the end of deferral. So if you defer April May and June for July's payment you owe 4x the payment.