How do I get out of an upside-down car loan?

I purchased a car three years ago without reading the contract, and I'm still upside down on the loan. How do I get on the positive side of the loan?

Answer
Getting out of an upside-down car loan is a difficult task, but you can do it! It just takes a bit of planning and a shuffling of your budget.
To get on the positive side of the car loan, you need to pay off as much of the original loan value as you can. This goes beyond just the mere monthly payment. You need to apply payments toward the car’s principal each month.
How you do this can vary, but options include:
  • Making two payments a month
  • Contributing a principal-only payment each month
  • Making a lump sum payment toward the principal once a year
If money is tight, you need to find ways to make more room in your budget. One way is to look at how much you’re paying for car insurance. Hop on the Jerry app to compare prices from top insurance companies. Jerry will even switch over the insurance, take care of the paperwork, and cancel your old insurance.
Eric Schad
Answered on Nov 08, 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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