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What should I do if I can't afford my car loan anymore?
I recently experienced a major life change that has affected my financial security, and keeping up with my car payments has been a major challenge. I’ve had to cut back on my spending significantly. What’s the best course of action if I can't afford my car loan anymore?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you can’t afford your
car loan
anymore, contact your lender immediately to inform them of your situation and discuss your options.It’s in the lender’s best interest to help you keep making payments, so they might be willing to be flexible and modify the terms of your repayment.
Here are some other options:
- Refinance the vehicle: Shop around for refinancing offers and you might be able to find a loan with terms to better fit yoru current financial situation.
- Give up the car: You could surrender the vehicle or allow it to be repossessed. The vehicle will be auctioned off and the proceeds will go toward paying back your loan—but you might still be on the hook for any remaining balance.
- Swap it: Sell or trade in the vehicle for something more affordable.
- Lower your other car costs: To free up room in your budget, you could look for a cheaperinsurance policy. You could save hundreds extra per year by switching to another provider or unlockinginsurance discounts.
View full answer
- Gregory R.
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