Missing a payment on your Snap Finance loan can have serious consequences. Snap Finance is a lease-to-own payment program that allows you to purchase furniture, appliances, electronics, and other items through a lease agreement. You make monthly payments over time until you own the item outright. If you miss a payment, Snap Finance will first try to work with you to get caught up. But if you continue to miss payments, there are repercussions you should be aware of.
Late Fees
If you miss a payment, Snap Finance will charge you a late fee. The late fee is typically $10 or 5% of your monthly payment, whichever is greater. So if your monthly payment is $100, your late fee would be $10. If your monthly payment is $200, your late fee would be $10 (5% of $200). This late fee is assessed for each missed or late payment.
Late fees start accruing after a grace period, usually of 10 days past your due date. So if your payment is due on the 1st of the month and you don’t pay until the 15th, you’ll be hit with a late fee. These fees add up quickly, making your lease even more expensive.
Reporting to Credit Bureaus
In addition to late fees, Snap Finance may report your missed payment to the three major credit bureaus – Experian, Equifax, and TransUnion. This can negatively impact your credit score. Each on-time payment helps boost your credit score, while missed payments can lower it. Too many missed payments can drastically drop your credit score by 100 points or more.
A lower credit score makes it harder to get approved for loans, mortgages, credit cards, and other financing in the future. It can also lead to higher interest rates when you do qualify. So those missed Snap Finance payments could come back to haunt you when you need to access credit down the road.
Repossession
If you continue to miss payments, Snap Finance may attempt to repossess the item you leased. Per the terms of your lease agreement, Snap Finance maintains ownership of the item until you make all required payments. If you default on your contract, Snap Finance can legally take the item back.
Snap Finance will first send you written notices asking you to catch up on payments. If you fail to become current after receiving notices, a repossession company will be sent to retrieve the item from your home. The repossession agent may ask you to voluntarily surrender the item once they arrive at your house.
If you refuse to give up the item or avoid the repossession agent, they have the right to take it from your premises without your consent. This could involve entering your home or detaching an appliance/electronics from power outlets. Refusing to comply with repossession efforts may result in legal action being taken against you.
Ban from Future Purchases
In addition to losing the leased item and damaging your credit, defaulting on your Snap Finance loan can get you banned from using Snap Finance services in the future. If you have a problematic payment history or a repossession on your record, Snap Finance may decline to lease future items to you.
They also share customer payment data with a national database used by other lease-to-own companies. So if you ruin your standing with Snap Finance, you may find it hard to lease from competing businesses as well.
Debt Collections
Once your account is severely delinquent, Snap Finance will likely place it into collections. Debt collectors will attempt to recover the money you owe by contacting you via phone calls, letters, and lawsuits. Here are some things that may happen if your Snap Finance account goes to collections:
- Collections calls – Debt collectors can legally call you asking for repayment.
- Wage garnishment – Your wages may be garnished if legal judgments are obtained against you.
- Bank levies – Debt collectors can seize money from your bank accounts.
- Lien on property – Liens may be placed on your home or other property.
- Civil lawsuit – You may be sued for your debt and have to pay legal costs.
Having an account in collections severely damages your credit and financial standing. It becomes very difficult to obtain loans, credit cards, utilities, rental agreements, and other services.
Payment Options if You Get Behind
If you do miss a payment, take action quickly to avoid further issues. Here are some of your options to become current on your Snap Finance account:
Speak to customer service
Contact the Snap Finance customer service team to discuss your situation. Explain why you missed the payment and see if they can waive late fees or create a personalized repayment plan. Acting quickly and communicating with Snap Finance may help prevent further issues.
Defer a payment
If you’re facing a temporary financial hardship, Snap Finance may allow you to defer a monthly payment to the end of your lease. This postpones the payment but your lease term will extend by one month.
Reinstate your account
If your account has been declared delinquent, you may be able to reinstate it by catching up on the missed payments. You’ll have to pay the total amount owed, including late fees, to bring your account current.
Voluntarily return the item
You can choose to return the leased item to a Snap Finance location. This ends your lease agreement and responsibility for future payments. However, you will still owe payments for the time you had the item, so this doesn’t erase what you already owe.
Refinance your lease
See if Snap Finance is willing to refinance your existing lease. This sets up a new payment agreement for the remaining balance owed. It may extend your lease terms but lower your immediate monthly dues.
Avoid Missed Payments
The best way to avoid issues with Snap Finance is to stay current on your monthly payments. Here are some tips to help you never miss a payment:
- Log into your Snap Finance account often to check due dates and balance.
- Sign up for automated payments or reminders.
- Know your payment due dates and mark them on your calendar.
- Set up payment alerts from your bank.
- Contact Snap Finance immediately if you’ll be late on a payment.
- Build an emergency fund to cover unexpected expenses.
- Reduce expenses in other areas if money is tight.
- Don’t take on new financing commitments when already stretched.
As long as you make your payments on time, you shouldn’t have to worry about repossession or collections. Communicate with the Snap Finance team if you ever anticipate issues paying – they want to keep you as a customer.
Conclusion
Defaulting on your Snap Finance lease obligation can seriously damage your finances and credit standing. You’ll face late fees, collections calls, potential repossession, and other headaches. To avoid these repercussions, do everything in your power to stay current on your monthly payments.
If you do miss a payment, act quickly to bring your account current. Talk to Snap Finance about ways to get caught up and reinstate your account in good standing. Consistent on-time payments will preserve your credit score and allow you to lease items safely in the future.
Take control of your Snap Finance agreement by understanding the implications of missed payments. With discipline and planning, you can leverage Snap Finance services without risking your financial health long-term.
Consequence of Missed Payment | Details |
---|---|
Late fees | $10 or 5% of monthly payment |
Credit bureau reporting | Missed payment shown on credit report |
Repossession | Item may be repossessed from your home |
Future purchase ban | May not be able to lease from Snap Finance again |
Debt collections | Account sent to collections agency |
Option if You Miss Payment | Overview |
---|---|
Speak to customer service | Discuss repayment options |
Defer payment | Postpones payment to end of lease |
Reinstate account | Catch up on all missed payments |
Return item | Ends lease but owe for usage |
Refinance lease | New payment terms for balance |
Tip to Avoid Missed Payments |
---|
Check account often for due dates & balance |
Set up auto-payments or reminders |
Note due dates on calendar |
Have bank send payment alerts |
Tell Snap Finance if you’ll be late |
Build emergency fund for expenses |
Reduce expenses if money is tight |
Avoid new financing when stretched |