Skip-a-Pay: What You Need to Know
Citadel’s Skip-a-Pay program allows qualified members to “skip” a payment on an eligible loan, and this can be a good option if you need some extra cash for the month. Before you skip your payment, however, it’s important to understand both the benefits and concerns of skipping that payment. The skipped payment doesn’t simply disappear—you’re just changing when you make it. Making informed decisions about your payments can keep you on track financially and help you reach your goals.
There are a number of reasons you might want to skip a loan payment, including freeing up some cash. For example, if your monthly car payment is $400, you can pay $35 to skip the payment and keep $365 cash in your pocket when you need it most.
- Unexpected expenses: An unplanned bill or pricey car repair can throw your budget for a loop. Skipping a payment can help cover those costs.
- Fluctuating income: If you’re experiencing changes in your income from month to month, whether from a job loss, illness, or unpaid invoices from customers, it can be a relief to skip a payment when your income is less than expected.
- Credit card debt: Putting your regular payment on a lower interest loan toward a balance you may be carrying on a high-interest credit card can help you get out of debt faster and reduce the amount of interest eating into your finances.
- Getting back on track: Things don’t always go as planned and you may end up off your intended financial path. Skipping your loan payment could be the chance you need to pause the money going out and reset your finances.
- Vacations and holidays: Add a little wiggle room to your budget and avoid racking up extra debt on high-interest credit cards by using the money from a skipped payment to pay for these expenses.
Be better prepared for unexpected expenses by setting up an emergency fund.Make a plan
A Few Things Not to Skip Over
Extra cash sounds great, but keep in mind it’s not “free” money. Knowing how Skip-a-Pay works will help you make a wise decision when it comes to how to budget your money.
- You still owe the money: The amount you owe doesn’t disappear. You’re just changing when you pay it, either bumping it to the end of the auto loan and making a larger final payment or doubling your next HELOC interest payment.
- Interest and finance charges continue to accrue: Skipping a payment doesn’t mean skipping the fees. Your last auto loan payment could be slightly higher, or the payoff date could be extended to account for the additional interest. With a HELOC, finance charges continue to accrue at the rate provided in your original agreement.
- Your auto loan term is longer: The deferred or “skipped” payment is added to the end of your auto loan – extending it by one month or more, depending on how many times you skip a payment. For example, if you skip a payment every six months on a 72-month auto loan, those skipped payments, 12 in all, add another year to your loan.
- Your HELOC periods are not extended: If you skip a payment for your home equity line of credit, there will be no extension of your draw period or your repayment period. Instead, your next payment will include two months of interest.
Impact on Your Credit
Usually, Skip-a-Pay doesn’t affect your credit score. Since Citadel has authorized you to skip the payment, you’re still paying according to the lending agreement and the skipped payment is not reported to the credit bureaus. If you skip a payment without this approval from Citadel, it’s considered a missed payment and can be reported to the credit agencies. If you find yourself needing to skip payments on a regular basis, however, this could be a sign that you need to re-examine your budget and financial habits. When used properly, Skip-a-Pay won’t negatively impact your credit. But repeatedly being unable to meet your financial obligations is cause for concern, and Citadel is here to help.
How To Decide to Skip
Life doesn’t always go as anticipated—sometimes there’s bumps along the way. That’s why Citadel offers the opportunity to skip the occasional payment to cover those unexpected expenses and give you the chance to rebalance.
Skip-a-Pay is intended to be a temporary pause in payments, not a routine occurrence or permanent solution. It’s a financial tool to be used responsibly, so before you skip a payment, make certain you understand your new auto loan payoff date or increased HELOC payment, plus any costs associated with the skip before requesting one. Have a plan to resume your regular payments and cover the extra fees skipping a payment incurs.
To qualify for Skip-a-Pay, your loan must meet the following requirements:
- All loan and deposit accounts must be in good standing
- No accounts may have a negative balance
- All loans must be current at the time of the request (grace period does not apply)
- You may not have any charge offs, bankruptcy filings, or repossession against Citadel
- If a loan has been in any type of loan assistance or deferral program within the last 12 months, it may not be eligible for the Skip-a-Pay program.
Please note all deferrals are subject to approval and other restrictions may apply. Citadel reserves the right to discontinue or modify the Skip-a-Pay program at any time if it is deemed to be in the best interest of the credit union.
Skip-a-Pay can be used to skip a payment on eligible loans once every six months, i.e., once you skip a payment, you must wait six months to skip another payment on that loan.
If you have multiple eligible loans, such as an auto loan and a HELOC, each loan will be on separate cycles depending on if/when they were last skipped.
All loans must meet the requirements to be eligible for Skip-a-Pay at the time the request is made. If you fail to meet the requirements, you are not eligible to skip a payment even if you have previously done so.
You can request to skip a payment up until 11:59 pm of the loan due date.
The earliest Skip-a-Pay can be requested is after you make your payment for the month prior to the month you want to skip. In other words, you cannot request to skip your October payment until you make your September payment.
You cannot schedule skip payments more than one month in advance. For example, you cannot request to skip your April payment in January.
Skip-a-Pay is not “use it or lose it”. If you receive a notification that you are eligible to skip a payment, you are not required to actually skip the payment. You can skip a payment at any time according to the terms of the program (account in good standing, haven’t skipped in the last six months, etc.).
In most cases, using Skip-a-Pay will not negatively impact your credit score. Because your skipped payment is allowed by Citadel, you are still “paying as agreed.” If you adhere to the repayment terms, your credit score will not decrease, and your credit report will not reflect any delinquent activity.
If you skip a payment without Citadel’s approval, you are no longer adhering to the repayment terms and the missed payment may be reported as delinquent.
Skipping a payment results in an extension of your auto loan by one month whenever you skip. All other terms and conditions as stated in your original loan document remain the same.
If you skip a payment for your home equity line of credit, there will be no extension of your draw period or your repayment period. Skipping a payment moves the current payment to the following month, doubling that payment.
You can view your Skip-a-Pay history at any time by logging into Online & Mobile Banking. Once you log in:
- Select the three dots (…) from the menu at the top
- Select Skip-a-Pay
- Select Skip-a-Pay History from the menu on the left
- Select Menu on the bottom right
- Select More
- Select Skip-a-Pay, then the History tab
No. Interest/finance charges will continue to accrue at the rate provided in your original loan agreement. Deferring a payment will result in higher total interest/finance charges than if payments were made as originally scheduled.
To skip a payment in Online & Mobile Banking:
- Log in to your account online or in the mobile app.
- Select the three dots (…) from the menu at the top on desktop or Menu (bottom right), More, then Skip-a-Pay on mobile.
- Accept the Terms and Conditions before continuing.
- Select the loan you would like to skip and the account from which you would like to draw the fee.
- Click review and submit.
If you have multiple loans with different ownership, you will need to utilize the switch account feature to access other loans.
Regular payments will resume on the first regular payment date of the month following the skip, i.e., if you skip your March payment, payments will resume on your April payment date.
Your due date will advance one month after skipping a payment. Please allow 24 hours for your new due date to be reflected in Online & Mobile Banking.
Yes, in addition to the $35 Skip-a-Pay fee, interest will continue to accrue on your loan. The longer it takes to pay off your loan, the more you will pay in interest overall.
The fee to skip a payment is $35 per eligible loan being skipped.
No, the $35 Skip-a-Pay fee is a processing fee and is not applied to your loan balance.
The $35 Skip-a-Pay fee can only be withdrawn from one of your other eligible Citadel accounts, such as a savings account.* If you wish to use an external account to pay the fee, you will need to transfer the money to a Citadel account before requesting the skip. Here’s how to connect your external accounts.
- If you are using Online & Mobile Banking, eligible accounts are presented in a dropdown box as you enter your request.
- If your request is being processed by a Citadel representative, you will be asked to select which account to pay the fee from if there are multiple eligible accounts.
Please note that you will need to have the full amount of the fee in one account. If you do not have sufficient funds in another account, the skip request will be declined.
* If you financed your auto loan through a dealership, you were automatically provided with a savings account as part of your loan agreement.
The fee will be deducted at time of request from the account of your choice. Skip-a-Pay requests will be denied if there are insufficient funds for fees. If you are paying the fee from an external account, you must transfer the money to your Citadel account before requesting to Skip-a-Pay.
Skip-a-Pay Auto Loans
If you previously elected Credit Life and/or Disability Insurance, or Debt Protection insurance, premiums will continue being added to the loan during the extended term months in order for benefits to continue.
No, your draw or repayment periods are not extended if you use Skip-a-Pay. The following month’s payment will reflect interest due for two months (the month you skipped and the current month).
Finance charges for amortizing loans will continue to accrue at the rate provided in your original loan agreement. Deferring payment(s) will result in higher total finance charges than if payments were made as originally scheduled; and will extend the terms of loan(s) resulting in extra payment(s) after you loan(s) would otherwise be paid off.
Finance charges for Home Equity Lines of Credit will continue to accrue at the rate provided in your original loan agreement. Deferring payment(s) will result in higher total finance charges than if payments were made as originally scheduled; and will not extend the terms of line of credit draw or repayment period.