5 Ways To Lower Your Current Car Payment
Are you struggling to make your car payments? Here are 5 ways you can reduce the payment costs.
Talk To Your Lender
When you’re temporarily experiencing problems making payments, contacting your lender may be a good option. Ask to skip a payment (have a payment deferred) or to have lesser payments for a few months by calling the lender and speaking to a representative.
The lender might be open to working with you to come up with a solution that benefits both of you. Remember that even if you postpone payments or agree to a temporary decrease in your monthly payment, the loan balance will remain the same, and interest will still be charged. However, it’s still preferable to accruing late fees or having your credit ruined.
Trade in your car
The best time to trade in your car is when you don’t want to sell it yourself, refinancing is not an option, and you need lower monthly payments in the long run. Nearly all dealers accept trade-ins in exchange for a new vehicle, and some dealers will purchase your vehicle outright without requiring you to purchase one of theirs. You need to do extensive research to find a dealer that suits your needs.
Remember to consider how much you owe and the value of your car before you commit to any payments.
Get a longer loan term
It’s not the best idea to get a loan with a longer term, particularly one with an 84-month term, because the interest accumulates over time. You could, however, extend the loan term to lower the payment minimum and then make larger monthly loan payments, only making the minimum payment when absolutely necessary.
Get a lower APR
Your monthly car payment may be lower if you pay less interest. A lower APR also means that more of your monthly payment is applied to the principal, shortening the amount of time it takes you to repay the loan.
As long as you submit all of your applications within a 14-day window, applying to multiple lenders won’t significantly harm your credit. Obtain several offers so that you have a choice.
Refinancing
If you’re constantly finding it hard to make your car loan payments, refinancing may be the best option. Depending on your situation, you might be able to get a loan with a longer term, a lower interest rate, or both. But take note: You’ll pay more interest overall if you take out a loan for a longer period of time. The following tips will help you refinance if your auto loan is in default.
You should apply for refinancing with several different lenders. Applying to multiple lenders won’t harm your credit if you submit all of your applications within a two-week window. The U.S. credit bureaus permit this time frame to allow customers to rate shops.
As a full-service, non-profit financial cooperative, CVF Credit Union’s mission is to assist the Catholic community. In the 29 communities we serve across the lower peninsula of Michigan, we are dedicated to bringing the credit union philosophy of “people helping people” to life by utilizing cutting-edge technology, competitive rates, low fees, and individualized service.