Help....Refinancing dilemma

[liberalswag]

So, I made an impulse buy in 2006 resulting in a debt of 28k (@8.64%; 84 months)obligation toward an auto loan. The pay off is 22.5k and I have been approved 18k (@8.72%; 60 months) as a refinance loan. That still leaves me coming out the pocket with alittle more than 4k. I cant afford to spend that kind of cash but I need a smaller car payment. Any suggestions?

[Inkstain82]

Originally Posted by liberalswag

So, I made an impulse buy in 2006 resulting in a debt of 28k (@8.64%; 84 months)obligation toward an auto loan. The pay off is 22.5k and I have been approved 18k (@8.72%; 60 months) as a refinance loan. That still leaves me coming out the pocket with alittle more than 4k. I cant afford to spend that kind of cash but I need a smaller car payment. Any suggestions?

Your loan is going to last longer than the car at this rate!

The best answer is to rearrange your budget so that you can afford to pay more. You are just robbing your future for the present putting these payments off like this.

If you are insistent on lowering the payments, you need to ask if you can extend the loan to 72 months or come up with more cash. Do you have anything you can sell for quick cash?

[Bimmer]

To get the best help on this forum, you should post your numbers: monthly income, monthly expenses, interest rates, etc. There are some great number crunchers here who can guide you in the right direction.

Generally, you should find a way to increase the monthly payment until you get the amount owed closer to resale value. And/or build up extra savings to cover a deficit if you sell the car for less than you owe. Trim unnecessary expenses to free up this money!

[maat55]

Are you trying to sell the car and borrow the difference? If you have ties to a bank and decent credit, sit down with a loan officer and tell them you want to down size car and borrow the difference for much cheaper car.

Start looking for cars in the 5k and less range. That would make your loan around 10k or less. If you cannot pull this off, you will have to pay extra towards the existing car till you are even and then sell.

Get a second job if necessary. There is no easy way out of this, get determined and get it done. Save and pay cash is the best way to buy cars.

[disneysteve]

The fact that they even offer 72 and 84-month car loans is criminal in my opinion. There ought to be a law capping loans at 60 months, and even that is pushing it.

Anyway, I agree with maat55. Sell the car. Buy an inexpensive one to replace it with and borrow the difference. A car loan should be something you can repay in no more than 3-4 years.

[liberalswag]

Thanks for the suggestions. A sale may be in order.

[maat55]

Keep it shiny and clean. Put it on craigslist and auto-trader. Park it with a sign as often as possible. In this environment, take a reasonable offer.

[srblanco7]

Not only is the loan duration inane, but the interest rate at 8+ percent is extremely high. Sell the car and buy one for around 5k.

[arthurb999]

Problem is if you bought a new car and try to sell it… you probably won’t be able to sell it for what you owe and will still be out of pocket.