how to get out of a car loan

how to get out of a car loan

How To Get Out Of A Car Loan

Search Add New Question What do I do if I lost my job, but have a car loan? Andrew Serrano There is really nothing you can do. Talk to the finance company, many times they will allow a one time postponement of a car payment or an extension where they take payment that is do now and add it to the end of the loan to give you time to get unemployment going or find a new job. Thanks! Yes No Not Helpful 1 Helpful 6 How can a vehicle lose over half its value in only a year? wikiHow Contributor New cars are released every year, driving down the value of older cars. Thanks! Yes No Not Helpful 2 Helpful 7 How do I get rid of a car that a dealer sold me that has turned out to be a lemon? Andrew Serrano Look at your owners manual for a section that specifically goes over warranty. There will be a regional person that handles Lemon Law claims. Look up the requirements of your state and see if you fit within them. Thanks! Yes No Not Helpful 4 Helpful 9 I purchased a car from a local dealer who doesn’t check credit. I have 10 months of payments and when I checked the value of my car, I discovered I am paying more for the car than it’s worth. What can I do about it? wikiHow Contributor When financing a car, you always pay more than the car is worth because of finance fees such as interest. The only way to avoid that is through 0-percent financing; however, the purchase price of the car usually is higher. Thanks! Yes No Not Helpful 10 Helpful 15 Bought a used truck yesterday and found out today I’m losing my job. What can I do now? Andrew Serrano Some states have a short period where you might be able to change your mind and return the car, but this is not likely. Talk to the person who sold you the car and see if he might have a heart and consider taking the car back. Anyone whose been in that situation will understand, but if this is a big corporate place, they may not be as understanding. Ask to speak to the finance manager; they may be able to stop the process. Thanks! Yes No Not Helpful 0 Helpful 2 Can I make three or four payments in one month? wikiHow Contributor In most cases yes, but it depends on who gave you the loan and what their contractual terms and conditions state. The only way to find out if this is possible is by asking the relevant company, it’s not possible to give a “one-size-fits-all” answer here. Thanks! Yes No Not Helpful 5 Helpful 8 How can I calculate the value of my car? wikiHow Contributor Go to kbb.com and answer a few questions and it will tell you the current market value of the vehicle. Thanks! Yes No Not Helpful 8 Helpful 10 How can I remove my co-signer from my car loan? wikiHow Contributor You would have to refinance the vehicle. Right now your co-signer is as financially responsible as you are. They will have to sign off on this as well, stating that they agree to being removed from the loan. Thanks! Yes No Not Helpful 5 Helpful 6 What is the feasibility of taking out a personal loan to cover the negative equity on a car I want to trade in for a new one? Andrew Serrano Depending on your credit profile, you may be able to wrap the negative equity in to the new car loan. This isn’t very smart since it will automatically start you off owing way more than the car will ever be worth, and if you are involved in an accident or the car is a total loss, your insurance company will only pay what the car is worth, not what you owe. A personal loan is usually going to be at a much higher interest rate and most lenders will want to know why you would want to take secured debt at a lower rate and pay it off with a unsecured debt at a high rate. Thanks! Yes No Not Helpful 3 Helpful 4 How do I know if my loan is conventional or unconventional? Andrew Serrano Conventional or unconventional only applies to mortgage and has nothing to do with a car loan, however to answer your question, it typically has to do with the balance and the type of documentation you are able to provide and the loan to value financed. Thanks! Yes No Not Helpful 0 Helpful 1 Show more answers
how to get out of a car loan 1

How To Get Out Of A Car Loan

Refinance. Refinancing is the process of setting a new loan agreement with your lender. This can also be referred to as “debt restructuring.” If you’re experiencing financial distress, it’s preferable to refinance your loan, rather than defaulting on it. If your car loan is inflating your monthly expenditures, you may consider refinancing – you’ll still have to pay a loan off, but the new loan may be easier on your wallet. Contact your lender to negotiate a refinanced loan – try to drop the interest rate or lower your monthly payments on the new loan to an amount your wallet is comfortable with. If the new loan makes the difference between whether you file for bankruptcy or not, it’ll be very beneficial for your credit in the long term. A good credit score will improve the chances that you’re approved for the new loan. If you can, spend some time living “lean” – saving money, paying off debts, etc. – as, over time, this will improve your credit score. Trying to refinance means that your lender will conduct a “hard inquiry” on your credit history to decide whether to approve you. The hard inquiry can have a minor negative effect on your credit score on the order of a few points. This usually goes away in several months, though the inquiry will be visible on your credit report for two years.
how to get out of a car loan 2

How To Get Out Of A Car Loan

If your loan isn’t upside-down, sell your car. Depending on how many payments you’ve made on your car and/or how your car’s value has fluctuated, it may, in fact, be worth more than the amount you still owe on your loan. In this case, you can sell your car and use the profits to pay off the remainder of your loan. You’ll be left debt-free, your credit will be untarnished, and you’ll be able to pursue a new car without any difficulties. Contact your lender before selling your car – you’ll be closing out your loan with your lender, so it’s important that they’re informed beforehand. Your lender will be able to give you specific instructions for closing your loan out – you may need to conduct the sale of the car at the lending institution so that you can immediately use the money from the sale to pay off the loan.
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How To Get Out Of A Car Loan

What’s best for your situation? Every situation is different. The simple example above comes out in favor of filing jointly, but you will need to run your own numbers to figure out what is right for you. Here are additional tips to help you figure it out: Know how much you owe. Make a list of all loan balances, interest rates, and the type of each student loan you have. You can find your federal student loans on the National Student Loan Data System. You can find information on your private student loans by looking at a recent statement. Estimate your student loan payment options. Using a student loan repayment estimator like the one mentioned above, determine your required payments when filing separately versus jointly. Calculate your tax liability. Use a tool like TurboTax’s TaxCaster or 1040.com’s Free Tax Calculator to calculate your federal and state tax liability when filing separately versus jointly. Be aware of long-term consequences. Filing separately might result in lower monthly payments today but more interest paid over time. If you make it to the 20- or 25-year forgiveness point, that could have tax implications down the line. Kantrowitz points out that “forgiveness is taxable under current law, causing a smaller tax debt to substitute for education debt. The main exception is borrowers who will qualify for public student loan forgiveness, which occurs after 10 years and is tax-free under current law.” Keep those long-term consequences in mind as you make a decision. Consider steps to lower your AGI. Your eligibility for income-driven student loan repayment plans depends on your AGI, which is essentially your total income minus certain deductions. You can reduce this number, and potentially lower both your tax bill and your required student loan payment, by doing things like contributing to a 401(k), IRA, or Health Savings Account. Keep the big picture in mind. These decisions are just one part of your overall financial situation. Keep your eyes on your big long-term goals and make your decision based on what helps you reach those goals fastest.
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How To Get Out Of A Car Loan

Walk away. If there’s nothing else you can do – you can’t get approved for a refinanced loan, you can’t sell your car to help pay your loan off, and you’re in too much much financial stress to simply pay your loan off normally – you may, unfortunately, lose the car. Tell your lender you can no longer afford your payments and that you are opting for a voluntary repossession. You will lose your car and give your credit history a big red mark. However, by giving your car back willingly, you avoid being held accountable for the costs associated with your car being repossessed by a repo agency. The lender will take possession of the car, sell it at auction, and, if the money from the sale doesn’t completely pay off the loan, file for collection on the remaining balance. If you do not pay your balance, a judgment will be entered against you for the amount you owe. Pay this balance – if you do, you may be able to get a “letter of satisfaction” from your lender, which shows future creditors that you did eventually pay back what was owed. A repossession, voluntary or not, will negatively impact your credit for years, making it more difficult for you to get approved for loans in the future and ensuring that the loans you do be more unfavorable (in terms of interest rates, down payments, etc.). If you can avoid defaulting on your loan, do it.

How To Get Out Of A Car Loan

How To Get Out Of A Car Loan
How To Get Out Of A Car Loan

Published on Jun 13, 2017 | Under Car | By michael ellis
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