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How can I get out of an upside-down car loan with 12% interest?
I made the mistake of purchasing a car for $15,000 at 12% APR. I've been making payments for six months, but my principal doesn't seem to go down. How can I get out of this upside-down loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“First things first, every car loan is upside-down at some point unless you put make a giant down payment. In that regard, everyone feels the pinch at some point.
Your problem lies in your high interest rate. This is such a high rate, it’s only right to assume you have poor credit. If that’s the case, keep making your payments for the foreseeable future.
If you keep making payments on time, you should start to see your credit score gradually improve. Once it gets into the 600s, you can most likely refinance the vehicle. Make sure to shop around for the best rates.
To cut your bills down in the meantime, you should also shop for
car insurance quotes online
, as you probably have to maintain full coverage on your vehicle due to the auto loan. Saving even a few bucks will help out until you have the credit to refinance.”View full answer
- Gregory R.
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