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How can I get out of a predatory car loan?
I'm stuck with a predatory car loan and the monthly payments are killing me. Any advice you have on getting out of this loan would be appreciated.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Predatory loans, or loans that charge hidden fees and exorbitant interest rates, are unfortunately far too common. Most people don’t read the fine print due to a lack of knowledge or the excitement of buying a vehicle.
But even if you’re locked into a predatory loan, you still have options. The easiest way to get out of a predatory loan is to
refinance the vehicle
. While this may prove difficult if you have a poor credit score, credit unions may be more willing to work with you, as well as lenders that you have experience or a long-term relationship with.If you can’t secure a new loan or refinancing, another potential solution is to pay off the loan in its entirety (this may not be an option if you’re borrowing money to buy the car).
Or, finally, you could just give the car back. Many predatory loan places won’t bother filing any marks on your credit report if you bring the car back, and because you returned the collateral, they may not have much of a case against you. Bringing the car back is also better than having it repossessed, in which case they’ll charge you towing, storage, and other fees.
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- Gregory R.
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