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How do you get away from being upside-down on a car loan?
I need to get out from being upside-down on my car loan to trade in my car with positive equity. What’s the best way to do that? I’m able to make bigger payments if that’s what it takes.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
It’s great that you’re able to make larger payments! Here are a few things that you can do to get out from an
upside-down
on a car loan:- Ask your lender. Sometimes, your lender can help you adjust your contract to make it easier to pay off your loan. Often, this means paying more towards the principal each month.
- Refinance your car. If you can’t adjust the terms of your current loan, it might be a good idea to find a new one. You could find a loan with a shorter repayment period to pay off the loan more quickly, or you could try to find a lender offering better interest rates.
- Sell your car. If you’re unable to get on top of your loan, you could sell your car to use the profits to pay off your loan. While this won’t give you positive equity when you purchase your new car, it will prevent you from having negative equity that rolls over into your new loan.
- Pay off the loan. Paying off the loan is the quickest and easiest way to get yourself out from under an upside-down car loan. If you’re financially able to pay off the remaining balance on your loan, this is your best bet.
If you’re looking to refinance your vehicle,
Jerry
can help. Jerry compares offers from multiple lenders to make sure you never overpay for your loan.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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