Most people who take out auto finance base the affordability of their loan on their income and capacity to meet their repayments at the time of financing. Rarely do people anticipate a change in their financial situation, but, when faced with a decline in income, auto loan repayments can often be difficult to meet. This is where car loan modification can help you through a difficult financial position with your credit rating still in good standing.One thing that most reputable lenders will want to avoid is their customers defaulting on their loan repayments. Chasing up bad debt through the legal system can be costly for lenders and for this reason many of them will be open to car loan modification if you are at risk of defaulting on your finance agreement. Car loan modification is quite simply measures that lenders will be prepared to set up in your loan contract to make your loan more affordable in your current situation. These changes may be short term or long term and will be established on an individual basis, based on the needs of the clients.The most common form of car loan modification is an increase in the term of your loan. Many lenders may allow you to refinance your auto loan for a longer period of time to help reduce your monthly repayments. This option can often be very beneficial to people who are more than half way through their finance term as the refinancing amount is based on the balance of your loan. This means that you will be refinancing a lower amount over a longer term and so this type of car loan modification can reduce your repayments quite considerably.If your financial difficulties are caused by temporary unemployment, some lenders may be able to freeze your repayments for a month or two to give you time to find employment and get back on your feet. This type of car loan modification, however, is not available through every finance company and not something that may be openly advertised by your lender so you will need to make inquiries with your lender to see if this is an option that they will consider. If this type of car loan modification is something that you need, then you will also need to be aware of any penalties that may be applied to your loan before you take this option. Some lenders may be prepared to freeze your repayments, but will add the interest rate applied to this period onto your subsequent repayments. So, before choosing this method of car loan modification you will need to gain a good understanding of how it will effect your loan in the future.If you are struggling to make your repayments and are at risk of falling into arrears, it is a good idea to approach your lender as soon as possible. Finance companies are more willing to negotiate car loan modification for customers who have had a good repayment record than those who have a short history of making late payments.