How do I get out of a high-interest car loan?

I have a car loan with an interest rate of 14%. Since I got this loan, I've built my credit up to 730. How do I get out of a high-interest car loan? Is this credit score good enough?

Answer
The best way to get out of a high-interest car loan is to refinance the vehicle. When you refinance, you get a new loan that you use to pay off the old loan, usually at a lower interest rate.
However, you can usually only do this if you have positive equity in your vehicle, meaning you owe less on your loan than the car is worth.
If you have negative equity, also known as being upside down on a car loan, it’s more difficult, but not impossible, to get a refinance.
Pay down your principal as much as possible with multiple principal-only payments each month, or make a lump-sum payment every few months. This will help you reach a break-even point from which you’ll be eligible to refinance.
If you want to make it easier to pay off your loan, you should take a look at your car insurance policy. You might be paying too much for the coverage you need. Just use Jerry to compare rates from over 50 insurers quickly and easily to find the best savings.
Eric Schad
Answered on Nov 16, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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