Having trouble paying your auto loan? Fortunately, you have a few options for help paying a car loan.
The first is a car loan deferment or forbearance. Many auto loan lenders (such as banks) are now offering this option to help borrowers during the recession. A car payment deferment can help you avoid defaulting on your loan. Contact your lender to find out if it offers deferment or other types of financial assistance for car payments.
A second option is to consider an auto loan refinance. Because auto refinance rates are currently low, refinancing can help you get lower car payments.
Just like a mortgage or student loan, a car loan refinance replaces your old loan with a new, lower-interest one. You can get a refinance loan online through lending institutions’ websites. Before you accept a new loan, be sure to get car refinance quotes and compare them to find out which one offers the best interest rate.
If you would like to get some extra cash to help pay other monthly expenses, consider cash back auto refinancing. Here’s how it works: Let’s say your original car loan was $10,000, and you have paid $4,000 of the loan. This means you have $4,000 in equity on the original loan.
With a cash out refinance loan, you can borrow against the equity you have in the car. So, if you get a new refinance loan of $14,000, you may be eligible to get up to $4,000 cash in your hand.