How does a loan rework function?
"My lender got a hold of me for a ""loan rework"" on my auto loan.
To do this, I have to put down a lump sum of $5,000, which only reduced my monthly car note from $320 to $307.
How does a loan rework function? The math doesn't add up."
“You’re right. Something doesn’t add up if you’re putting $5,000 toward your principal, and your payments are reduced by just $13. It sounds like the loan office is just cutting down your principal, which only cuts down the length of the loan.
This loan rework is more like a refinance with another down payment. You need to inquire with your lender about the new interest rate and the length of the loan as well. Hopefully, they’ll tell you why the payment was barely reduced.”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Read advice from car experts at Jerry
Browse by topics
What others are asking
How long does it take for a car loan to be approved?
I need a car loan in a hurry since I need a car to commute to my new job. How long will it take to get approved?
Mar 12, 2021
Why is my car insurance premium so high in Michigan when I drive such a cheap car?
I'm paying $210 a month for car insurance on a $1,200 vehicle. Why is Michigan so expensive for car insurance?
Apr 28, 2021
Can a dealership cancel an auto loan after letting me drive off with a Toyota Highlander?
"A dealership said I could finance a new Toyota Highlander with a trade-in and $1,000 down. Then I got a call that said the lender can't do the deal unless I put $2,000 down. I didn't want to negotiate, so I let the problem go. A month later, I get a letter saying my financing is canceled. Can an auto dealership do this?"
May 21, 2021