Hundreds of borrowers may be going upside-down car loans in the United States every year. Car values depreciate fast and so, when you fail to stay current on monthly payments, a situation is soon reached wherein you owe more on your car than its actual market worth. There may be varied factors that can make you go upside-down car loan installments. These might include things like the inability to pay down payment, longer loan terms, loan roll-overs, unnecessary add-ons, etc. But you need to know that there are methods to retain positive equity in your car.
Here is some important information pertaining to the different ways which can help you to get out of an upside-down car loan.
- One of the ways to deal with an underwater auto loan is to try and repay the principal loan dues as quickly as possible. To that effect, see if you can pay some extra money every month.
- You can even try and divide payments into two halves each month. Pay monthly car installments every two weeks as it will mean that you will end up paying one full payment at the end of the year.
- You can always try and make an extra monthly payment whenever you receive funds from tax refund or deposits. It will serve to reduce your debt quicker and pay off an auto loan early.
- If your car has market worth, refinancing it could be another option that you can explore for bringing down the interest rates and get rid of the existing car loan instantly. But such a proposition can make sense only if your credit score has improved ever since you got the vehicle on finance.
- In case you have just received a tax refund, you can use the money for getting rid of an expensive car loan or else utilize it for financing a new car. The tax refund amount will serve as down payment.
- You may also consider selling off your vehicle and use the proceeds for paying a large down payment on new auto loan financing. Alternatively, vehicle trade-in may also be considered.
To arrive at an informed decision, it could be better if you seek specialist help that is easily accessible online. Such a move may also enable you to save time, energy and money.