Can I get a new Car Loan if I’m upside down on my old one?
If you’re upside down on your car, but you have to replace it, then you know that finding a dealership and bank that is willing to work with you can be difficult. Because selling your old car will mean that you still owe money on a car loan, banks tend to take a negative view of these types of sales. Many banks believe that borrowers who no longer have a car that can be repossessed are at much higher risk of defaulting than borrowers who do have a car that can be taken away. For this reason, many loan agreements stipulate that the borrower must maintain ownership of the vehicle for the entire life of the loan.This means that if you want to sell a vehicle before the loan term is up, you have to immediately pay off the balance of the loan. If you can’t do this, however, there are options.To start, it may be possible to include your old car debt in the loan for your new vehicle. Typically, this is only possible for people with very high credit scores. It’s also important to note that these loans are considered to be higher risk by the banks, so most of them come with higher interest rates than the average new car loan.Another option is to refinance the leftover debt with another loan. Most commonly, consumers choose to use a credit card to pay off their old car loan. The interest rate and transfer fees for this process, however, can mean that a consumer will pay hundreds of dollars more just to carry the loan.One of the best options is to take care of the debt with a debt consolidation loan. These loans can offer a lower interest rate than most credit cards and auto “bridge” loans, and they give consumers a choice of payment plans. That means a borrower can find a payment that will make it possible for him or her to pay for his or her new car loan and pay off the debt on the old vehicle.If your old car is breaking down, or if it has been totaled in an accident, then you need a plan to replace it without ruining your personal finances. A debt consolidation loan can give you an affordable payment at a low rate. You can get out of debt quickly, and get the car you really want.