We're introducing new updates to our Skip-A-Pay program, effective July 1, 2024, with this year's Summer Skip-A-Pay promotion. Under the new program, all eligible loans* will be allowed to have three (3) skipped payments for the life of the loan. Please note, skipped payments approved before July 1, 2024, will not count against the 3-skip maximum. These changes are designed to provide a more structured approach to managing loan payments, ensuring your financial stability in the long run.
Why Change Now?
Skip-A-Pays were initially implemented as an alternative for members facing financial hardships. These skips were designed to provide a temporary extension if members would not have been able to make a full loan payment that month. They were to be used sparingly after eliminating other possibilities to collect payment as agreed.
We are concerned that in recent years, members have turned to these skip-a-pays as a dependable means to cushion their budgets in the summer and/or winter. Plans to use funds that should go to a loan payment regularly - once or twice per year - for other expenses instead can create a precarious financial situation down the road and also foster unhealthy financial habits. At ARC, our mission is to provide beneficial financial services to our members. We can ensure we do this by helping you make informed, financially responsible decisions when borrowing, like putting a threshold on the number of times you can skip a loan payment during the life of a loan. It's important to note that skipping payments may extend the term of your loan and increase the total amount of interest you pay over the life of the loan.
What Are My Options?
Automatic Transfers
We have easy, set-it-and-forget-it auto transfers that can help you replace the need for a skipped loan payment in the summer or around the holidays. For example, suppose you get paid bi-weekly and set up an automatic transfer to a club account at the beginning of June. That should give you 12 to 13 paychecks until Black Friday, when Christmas shopping peaks. Scheduling $25 to transfer from your checking account to your Christmas Club on payday when your direct deposit hits will give you at least $300 saved by Thanksgiving. For many of us, this is roughly equal to the "extra" we would have from a skipped loan payment - remember, you're also saving $35 by not paying the skip-a-pay processing fee. Do the math and see what you can comfortably set aside each paycheck; even $10 or $15 each pay adds up over several months. If you usually skipped a January loan payment, you have even longer to build up that Christmas Club. These alternative options, such as setting up automatic transfers to a club account, can help you budget and save for future expenses, reducing the need to skip loan payments.
As a reminder, our Christmas Club, Vacation Club, and Special Share accounts can be opened easily by logging into your online banking, opening the menu, and choosing "Open Sub-account." These accounts do not require a minimum balance and do not have any maintenance fees or associated charges. The funds stay there, separate from your checking and regular savings, until you are ready to use them. If you choose to open a Money Market account online, there is a $2,000 minimum balance that must be transferred over from a linked ARC account.**
Talk to our Certified Financial Counselor
If you're feeling overwhelmed by your current financial obligations and need help creating a budget to get back on track, we're here for you. Our Credit Union Certified Financial Counselor is available to assist you in getting your finances back on track. Reach out to us at (814)946-0857, email memberhelp@arcfcu.org, or stop in to setup an appointment. This free, confidential service is available to all our members, regardless of age. We're committed to helping you regain control of your finances.
Talk to a Loan Officer
If you've explored all your options and are unsure about how these changes will affect you, we're here to assist. We understand that change can be challenging, but you're not facing it alone. Contact a loan officer at (814)946-0857, option 4, for personalized information on your borrowing situation. We're here to guide you through these changes and help you make the best decisions for your financial future.
*Offer not available on ARC Visa cards, mortgages, home equities, business loans, or lines-of-credit. You must have at least a six-month payment history established on the loan(s) and no accounts can be delinquent when the skip-a-pay is requested. Program terms are subject to change without notice; additional criteria may apply. You must submit your skip-a-pay form at least five (5) business days before the due date(s) of the payment(s) to be skipped. Offer is subject to credit union approval; failure to meet these program guidelines may result in the request being denied. There is a $35 processing fee for each loan payment you skip. This fee does not reduce the principle. Skipping payments will delay the payoff of the loan, and the skipped payment(s) will continue to accrue finance charges. By skipping payment(s), the benefit from GAP insurance (if applicable) may be reduced by the amount of the payment skipped. Life and disability insurance (if applicable) will continue to accrue.
**Linked accounts within online banking must share owners with matching TINs; additional criteria and limitations may apply. Questions on setting up linked accounts can be directed to memberhelp@arcfcu.org or by call or text to (814)946-0857
