How to Get Rid of a Bad Car Loan Are you currently stuck with a car loan that is less than desirable? If the answer is yes, you are not alone. Bad car loans are very common nowadays, and they can be very frustrating to deal with. Regardless of the contributing factors that led to your bad car loan, you will be glad to know there are ways to take care of the situation. The following tips can help you get rid of a bad car loan. Analyze Your Situation When you have a bad car loan, it usually means that your loan is upside down. An upside down car loan is the result of you owing more money on your loan than what your car is worth. For example, if you owe $10,000 on your car but it is only worth $7,000, your car loan is considered bad, or upside down. There are several factors that can contribute to a bad, upside-down car loan. First of all, cars begin to depreciate in value as soon …show more content…
Be sure to check with multiple lenders before deciding on one. Find out all the particulars of every loan and lender you look into as well. You want to choose a loan that will not only pay off your existing bad loan, but help improve your financial situation as well. Whether this means a better interest rate, lower payments, or a different loan term, make sure you can manage the refinanced loan before agreeing to it. Sell The Car Another, less desirable way to get rid of a bad car loan is to sell your car at a loss. Although you will not make enough money from the sale to pay off the loan entirely, you may be able to borrow the remainder. Your bank or credit union may be willing to lend you the rest of what you owe if it means the bad car loan gets paid off. Keep in mind that if you take this route you will also need a backup plan for a car, since yours will be long gone. Consider a Home Equity