"Is there any way to refinance a car that is worth $5,000 that I owe $11,000 on? "

"I bought a used Kia two years ago, putting $1,500 down. My car loan interest rate is nearly 23%.

I have applied for a refinance loan with a few banks, but they have all denied me. Is it possible to refinance this kind of loan?

"

Answer
“The only way to refinance your Kia is to pay down the loan until you are no longer upside-down on it. At that point, you can apply for refinancing.
When you finance or refinance a car, the loan is secured by that car, which means that the vehicle needs to be worth the amount financed.
Unfortunately, because of your high interest rate and your low down payment, you have been paying more on your interest than your principal. This means you still owe almost the same amount of money you bought the car for two years ago, but the car is no longer worth that much. “
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Johnny Puckett
Answered on May 25, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
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