You financed your car months ago, but have already tired of the large monthly payments that have been a drag on your budget. You have a job, but you know that your past credit problems resulted in you receiving a car loan with a double-digit interest rate. These unfavorable terms are what is causing you much angst. Fortunately, you may be able to do something about. Read on and we'll explore your options.
1. Check your credit. If you bought your car a year ago and have been making payments on time, then your credit has likely improved, provided that you are timely with all of your other payments too. Likely, when you applied for a car loan you were considered a subprime buyer, which is anyone whose credit score is below 598. Visit MyFico.com to find out what your credit score is today as it may have increased considerably.
2. Refinance your loan. Just as there are lenders willing to refinance homes, there are lenders that are willing to refinance cars. If your credit has improved, then check with your current lender to see if you qualify for a lower rate. If not, then look elsewhere. Ask your banker or credit union representative about loans, explaining your situation. Look online too by entering "car loan refinance" in the search bar to find lenders that may be able to get you a new loan. If approved, your current loan will be paid off and you'll make future payments to your new lender.
3. Pay it off early. Instead of swapping loans, perhaps you're in a position to pay off your loan quicker. Yes, you're strapped, but large tax return check can be used to pay down your loan faster. It may not be enough to pay off your car, but it could shave many months off of your loan. You'll save money in the long run.
4. Sell your car. Do you still need your car? Do you still need THIS car? Maybe not. So, consider selling it. If your credit has improved sharply since you took out your car loan, then perhaps trading it for a new car makes the most sense over the long run. Dealer backed financing for people with good credit remains quite low too. Use a loan calculator to learn whether a new loan works with your budget.
If you can't do any of the above, then you're stuck with your car loan. At least for now. Hold on because in six months your personal fortune and credit outlook might improve, allowing you to take action and get out from underneath a loan that is weighing you down.
Matthew C. Keegan is editor and publisher of "Auto Trends Magazine." Matt is also a contributing writer for Andy's Auto Sport and affiliated websites, an aftermarket supplier of quality auto parts including EBC Brakes and Eibach Springs.
View the original article here
This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.
0 komentar:
Posting Komentar