To own car worth $20000 is a huge investment and an accomplishment for you. However, would you still feel the same if after the first two years, your 20,000 – dollar investment will only be worth $14000 or $12000? For sure, you will be so disappointed and annoyed especially if you already owe more on the loan because of the interest rates and fees than the actual value of your car today. So much more, if you have taken out one of the bad credit car loans available for credit challenged borrowers because these loans come in expensive rates. You are now upside down on your car loan? So, what will you do?
How To Get Out Of An Upside Down Car Loan?
If you find yourself stuck in upside down car loan, the best thing to do is to keep the car and just continue making timely payments so you will not be charged with late fees. Over time, you will have the option to refinance it, if its monthly payments are too high and is really making your financial situation suffer. If you reached that point that you are close to paying off your loan and in no time, you will no longer be paying for the monthly dues, you will surely feel that satisfaction and accomplishment once again.
However, if you don’t want to hang on to your car because you don’t want to be paying much for something with less value then you have the option to sell the car, of course with the consent of the lender or dealership that you will just refinance the negative equity. You can also trade in the vehicle or get a new car loan but you will have to be aware that this will not offset the negative equity on your previous loan. It will be added to your new loan so make repayment a whole lot easier for you, chose a less expensive car or used vehicle.