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How do I get right side up on a car loan?
I was just looking over my loan and noticed that I owe more than my car is worth. How do I get right side up on a car loan like this?
Matthew Macgugan · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
It’s a good thing you checked up on your loan and caught this!
Getting out of an upside-down car loan
will make your financial situation much easier to manage if your vehicle is totaled or you can’t make payments. The good news is there are a few ways to get on top of your car loan.Making extra payments on your loan will help you get right side up again. The quicker you pay off the loan, the quicker you can cancel out that negative equity. You will also save some money on interest over the life of the loan.
If making extra payments isn’t feasible, try
refinancing
. Refinancing might help you get lower interest rates or extend the loan, so you can have some wiggle room to pay extra. Keep in mind that refinancing won’t lessen the amount that you owe and may result in slightly higher payments, so be prepared to pay a little extra every month to pay off the loan. Jerry
is a great resource for comparing loan options from multiple lenders. Use our refinance calculator and avoid the hassle of searching for lenders yourself. Jerry makes it easy by finding the best lenders at the best rates. On average, car owners pay $85 less every month by refinancing their auto loan.If refinancing doesn’t help, then keep paying your loan normally. If you continue making on-time payments, you will eventually catch up to the value of your vehicle and get out of negative equity. This will take some time, but you may be able to supplement your upside-down loan by purchasing
gap insurance
, which will cover the difference between your loan amount and an insurance payout if you total your vehicle. Good luck.
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- 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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