Can you lower your car payment without selling your car?
If you’re struggling to make your car payments every month, you’re not alone. Millions of Americans struggle with debt, but car loans seem to be one of the hardest types of credit to get rid of. After all, you probably need your car to go to work. So, what can you do to lower your payment without selling your car? Try these suggestions.
- Look into refinancing. This is a great option for people with good credit scores and who also owe less on their car than the car’s value. Essentially, you’ll shop for a new car loan but instead of buying a new vehicle you’ll just payoff the loan you already have. If you have a high interest rate, this can be a good way to lower the amount of interest you pay on your car loan. By extending the payment term, you could also get a lower monthly payment.
- Ask for a loan modification. If you’re having temporary financial problems, you might want to call your lender and ask for a loan modification. Often, banks can extend the term of a loan or forgive a few missed payments in return for tacking extra payments onto the end of the loan. Just be aware that sometimes this type of modification can have a negative effect on your credit score.
- Consider debt consolidation. If you include your car loan in a debt consolidation, odds are good that you can get a lower monthly payment than what you’re paying right now for all of your debt. During the application process, a debt counselor will help you to find a loan that offers a payment that is less than what you’re currently paying. You’ll also be able to include other debts such as credit cards and personal loans in your loan. Ultimately, you could reduce the amount that you spend on all of your debt repayment by hundreds of dollars a month.
- Reduce your maintenance plan. If you purchased an extended warranty when you bought your car, you might be able to cancel it for a partial refund. Many states have laws requiring dealerships to offer a pro-rated refund of the money spent on these warranty plans if the customer asks.