for many american families the economic crisis of recent years has impacted both their personal finance that it has become very difficult to continue doing the correct car payments and have relapsed into serious financial problems.
Faced with these situations, people should keep in mind that there are different alternatives to mitigate the problem, among which are the following three:
Request loan modification
With a loan modification, you’ll be able to work with the lender to change the terms of your loan, which could include lowering your interest rate, deferring payments for a period of time, or changing your payment due date to be better align with your revenue schedule.
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Plus, you’ll also be able to extend the term of your existing loan, which will generally lower your monthly payments but pay more interest over the course of your loan.
refinance car loan
In case your lender is not willing to modify your loan, you have the option of refinancing it. You will be able to pre-qualify with several lenders to find the best rate and terms.
For people who have accounts at a local bank or credit union, you may be able to find better rates there because you have a history of lending with them.
Steps to refinance your car:
- Think about whether refinancing is the most convenient.
- Analyze the current loan.
- Check credit score.
- Calculate the value of your car.
- Find the best refinance rates.
- How much would you save by refinancing?
- Get the paperwork in order to apply for refinancing.
Talk to a dealer and request a change
One of the first things you should do is contact your dealer to see if it’s possible to trade in your car for a cheaper model.
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This might be easier if you originally bought the car through the dealer and the loan is financed by the dealer.
If this is not your case, it is important to contact the dealer to see what alternatives are available for your situation. Additionally, you may be able to save a significant amount of money by switching to a less expensive car depending on the difference in price between your current car and the new one, as well as the term and loan rates for the new one.
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