If you have a car loan that is costing too much money every month and you find it difficult to continue paying, are there ways to get out? While it is easy to sell your car if you have positive equity, many people owe more on car loans then the market value of the vehicle. Or is it a good idea to get another unsecured installment loan in order to keep current with your car loans?
Due to the fast depreciation on car values and generally low resale values for cars, it is very easy to get upside down on the loan. The first method is to try and reduce your car loan rate using a refinance, either with your existing lender or a new one. Make sure you do not extend the term on your car loan, because you may end up paying more interest in total. Many car owners are caught in this loan refinancing trap because they think the monthly payments are now lower.
If refinancing your car loan is not possible, try to sell off your car yourself instead of trading it in at a greater loss. You are likely to get more money back when you sell it. Spend some time cleaning it and detailing it nicely, as well as put together all the repair and maintenance history for the buyers. Doing so can help you sell the car faster at a better price. Check out https://personalcreditfaq.com/category/bad-credit-auto-loans/ for more information on car financing matters.