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How to lower your car payment without refinancing Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content. We also allow you to conduct research and compare information for free and help you make informed financial decisions. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this website are provided by companies that pay us. This compensation could affect how and where products appear on the site, such as, for example, the order in which they appear in the listing categories and other categories, unless prohibited by law. This applies to our mortgage, home equity and other products for home loans. This compensation, however, does affect the information we publish, or the reviews that appear on this website. We do not contain the universe of companies or financial offerings that could be available to you.

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3 min read published August 22, 2022

Written by Allison Martin Written by

Allison Martin’s career began more than 10 years ago as a digital content strategist. She’s been published in several leading financial publications, including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since late 2021. They are dedicated to helping their readers to control their finances with concise, well-researched, and well-documented information that breaks down otherwise complex topics into manageable bites.

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This can make your monthly payments easier to afford. However, you will likely have to agree to an and pay higher interest over the duration that you take out the loan. Refinancing isn’t the only way to lower the cost of your car. Other viable alternatives can alleviate the stress that comes with having to deal with a large vehicle payment and allow to make room in your budget. Three ways to reduce your car payments without refinancing in the legal dotted lines to take out an auto loan typically, you’ll be given the option of a monthly installment that is due each month for a set period. If you thought the payments were feasible at the time you signed the loan however, it isn’t working due to modifications in your financial circumstances, there are options available that do not need . 1. Request an loan modification. Contact the lender to explain that you are struggling to stay afloat financially and risk getting in debt on auto loan payment. The first person you talk to might not provide much advice or alternatives, however, you can ask for an loss mitigation team to identify someone who can help. Repossessions are expensive and take a lot of time for the lender. Therefore, they might offer to modify the terms of your loan, which could include lowering either the rate of interest or loan time frame, in order to improve the . Or you and the lender could offer a shorter-term payment plan , which involves delaying your payments for a few months to give you urgent financial relief. If you’ve already missed the payment due to your auto loan, you may not be out of luck. However, you should communicate that you’re facing financial hardship sooner instead of later. The lender might agree to break the past due balance into smaller amounts that you’ll pay over a longer period. 2. Trade it in to purchase a car that is less costly If you’re not or have a debt that is greater than it’s worth — trading in your car to purchase an affordable one might be sensible. The difference in the value of your trade-in and what is owed on the current loan will lower the new loan amount. You won’t need to endure the stress of listing your car for sale and hoping to attract the right buyers. Market conditions are making it easier to receive top dollar for your trade-in. New car prices are at an all-time high, creating an increase in demand for used vehicles. Selling your car today is an easy procedure that involves taking it to the dealer for them to examine the vehicle and make an offer. The price of the trade-in depends on your vehicle’s make, model, mileage and condition. If you visit several dealerships prior to making a decision, you can negotiate the best price. If you’re looking to trade in your car, though it’s best to make it happen as soon as possible. The prices of used cars are beginning to stabilize, meaning trade-in offers will likely be lower soon. 3. Sell privately and purchase an affordable car if you’re looking to earn more money for your car think about . You will need time and patience however, you can maximize the savings you make since private sales usually result in more money in the pockets of the seller. You will be able to save more on the purchase of your next car. Word of caution: There’s still a car for sale across the country because of supply chain issues. But as mentioned above the used car market is shifting and a decline in the price is likely. This means that you won’t make as much money from your vehicle as you have just a few months back during the used car market boom. If you want to refinance, it’s best to do so. Refinancing your auto loan may be a good alternative if you’ve got excellent or good credit and qualify for a lower rate of interest. But here’s the catch: You should request an loan period that is similar to or equal to the remaining time on your current loan. In the event that you don’t, you’ll receive an easier payment, but you could pay thousands or hundreds of dollars more in interest over the loan term. If you are unable to reach an agreement between you and your lender or swap your current vehicle for one that will meet your requirements, refinancing could assist you in avoiding repossession. Additionally, you’ll get the lowest amount of payment and will also protect your credit score, even if that means paying the lender more in interest. Next steps A hefty vehicle payment can stress your budget and make you think about changing your loan. However, you’ll be charged more for interest if you obtain a higher interest rate or an extended duration, so talk to your lender to request a loan modification. Consider also changing your car to an affordable one. Consider having your car appraised in order to determine how much it’s worth, and then explore options to determine if there are more affordable vehicles out there that come with lower monthly payments and will meet your requirements. If you find alternatives that are viable, then collaborate with an lender to obtain the purchase of a new car and loan that could help improve your financial situation. Find out more

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Written by

Allison Martin’s career began more than 10 years ago as a digital media strategist. She’s been published in several leading financial media outlets including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are committed to helping readers gain confidence to control their finances with precise, well-researched and well-documented information that breaks down complex subjects into digestible pieces.

Auto loans editor

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