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How do I get out of a high-interest car loan?
I have a car loan with an interest rate of 14%. Since I got this loan, I've built my credit up to 730. How do I get out of a high-interest car loan? Is this credit score good enough?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The best way to get out of a high-interest car loan is to
refinance the vehicle
. When you refinance, you get a new loan that you use to pay off the old loan, usually at a lower interest rate.However, you can usually only do this if you have positive equity in your vehicle, meaning you owe less on your loan than the car is worth.
If you have negative equity, also known as being
upside down
on a car loan, it’s more difficult, but not impossible, to get a refinance.Pay down your principal as much as possible with multiple principal-only payments each month, or make a lump-sum payment every few months. This will help you reach a break-even point from which you’ll be eligible to refinance.
If you want to make it easier to pay off your loan, you should take a look at your car insurance policy. You might be paying too much for the coverage you need. Just use
Jerry
to compare rates from over 50 insurers quickly and easily to find the best savings.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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