How to
Get Rid of a Car Loan
A car
loan can be a true burden, especially when you aren’t in a comfortable
financial situation already.
But when you are upside down on your car loan is when
things get especially tricky. This principle can get you into financial
trouble, debt and the complete inability to pay for your car.
We’d
rather avoid these sort of situations, which we’ll be given you tips for. But
sometimes you’re already deep in it, then too is there is still possibility to
get yourself out, and we have some action steps for that too.
So, continue
reading if you want to know how to get out of an upside-down car loan.
What is an upside-down
car loan?
Before
we’ll be solving problems, we need to identify our problem. Essentially an
upside-down car loan is a car loan that is worth more than the actual car. So,
you owe more money than the worth of your car.
Having
an upside-down car loan isn’t necessarily a problem, but it can become one. As
soon as you’re struggling with paying off your car loan, or in your financial
trouble, having an upside-down car loan is a great burden.
When in debt you
might want to sell your car to pay off the debt, but this won’t get you
anywhere when you’re in a upside down car loan. You can sell your car, but
you’ll still owe money for the car.
Another
issue might occur when you’re buying a new car while you were in an upside-down
car loan on your last car. You may have sold your old car but you still owe money
for it, and with your new car, you now have to pay off two car loans!
And don’t
think this isn’t going to happen to you as 27% of all car sales in 2014 were
made to people who were in this exact position.
How to prevent troubles
with your car loan
‘An ounce of prevention is worth a
pound of cure’
Benjamin Franklin once said. And even though he was talking about your health,
the same principle works here.
·
Make
a down payment of at least 20%, but pay the entire car in one go if this is
possible for you. Handling this rule will also prevent you from purchasing a
car you actually can’t afford.
·
Pay
the car loan off as fast as you can. This will prevent you from paying tons and
tons of interest. Plus, you won’t have to carry the burden of a car loan for as
long.
·
Do
your research before buying a car! Make sure you know what the car is really
worth at the moment of purchase so you can avoid overpaying for your car.
·
Don’t
go crazy on the car upgrades. Upgrading your car sounds great, but it won’t add
anything to the value of your car while it does add to the amount of money you
owe the company.
·
Maintain
your car! This is the easiest way to keep its value as high as possible and
prevent you from going upside down on the car loan
·
Don’t
buy a new car before you paid off your old one. This one might speak for itself
but we saw that for 27% of car-buyers this is not the case. So, save yourself
this trouble and pay the old off first
How to get out of an
upside-down car loan
If
you’re already deep down in trouble, then these prevention tips won’t work for
you anymore. Luckily, we’ve got a plan that will tell you how to get out of a
bad car loan
1.
Try
to pay off the car loan as quickly as possible: Try raising the amount of money
you pay towards the loan monthly.
2.
When
you’re struggling with paying the minimum amount, then you could sell some of
your things to make some extra money. When your debt is really bad then you
might even want to sell the car. No, you won’t be out of the car loan completely.
But it can still make a huge difference
3.
Find
other ways to make some extra money. When everything else fails picking up a
side job or trying to create your own side hustle from home can be a good way
to put some extra money towards paying off your car loan.
4.
Move
the balance of the car loan to a credit card. A credit card company can offer
better interest rates than the car company. Some credit cards even offer an
introductory interest rate of 0% This gives you some more time to pay off the
debt
5.
Opt
for debt help options: When your financial situation is at rock bottom you
might want to consider debt settlement, debt consolidation or filing for
bankruptcy.
How to Get Rid of a Car Loan
This
was all you needed to know about how to get out of car finance, and the
above-mentioned steps will help you get out of this situation as soon as
possible.
When you are still in a secure spot, make sure to follow the
prevention tips and not get into any tricky situations.
Now I
would like to ask you to share this article with anyone you think might need
this information. It’s a big problem that many people are struggling with, some
without even realising it.
So, notifying people about this issue is important
and we’d like for you to step in and alert people through sharing the article.
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