How to Get Out of a Car Loan If You Can't Afford the Payments
There are ways to get out of a car loan if you cannot afford the payments. Millions of people are unemployed or took pay cuts in the recession and do not have several hundred dollars every month for a car payment. Sometimes the loan on the car is significantly more than the vehicle is worth, and that makes it difficult to sell. However, there are solutions for vehicle owners who can no longer make payments.
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Instructions
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Check your purchase paperwork to see if you bought the vehicle under a dealer buy-back program in effect during 2009. If you did, then read the terms carefully to see if you qualify.
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Sell your car if the vehicle has more value than the loan. Pay off the car loan and use any overage to buy less expensive transportation. You will usually get a better price by selling the car privately.
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Apply for a personal loan at your credit union if you owe more than the car is worth. Ask for an amount equal to the difference between the value of the car and the amount of the loan. This will allow you to sell the car and get out of the car loan. You will still owe the credit union, but the payments will be more affordable.
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Refinance the car loan through your credit union if you are not able to sell the vehicle. Credit unions have favorable loan terms, so refinancing may lower the monthly payment to a level that you can afford.
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Trade in the vehicle for a used car if the payments on the new loan will be significantly less. This will only work if your car does not have negative equity. Negative equity means that you owe more than the car is worth.
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References
- Photo Credit red sports car image by palms from Fotolia.com
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Comments
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brandon davis
Jul 30, 2010
In the event that the Loan to Value of your vehicle prohibits your refinancing it or selling it, certain vehicles can be re-contracted through walkawaylease. That will save your credit and provide opportunities for other people-B
