Getting Out of an Upside-Down Car Loan
Being upside down on a car loan—owing more than the car is worth—is tough, but you can fix it.
What to Avoid
- Trading in the car: Rolls debt into a new loan.
- Refinancing: Lowers payments but keeps you in debt.
- Surrendering the car: You give up the car and it doesn’t erase the loan.
What to Do
- Pay it off early: Throw every extra dollar at the loan to pay it down.
- Sell the car: Sell it yourself at fair value and cover the remaining balance with savings or a small credit union loan. Better a small loan you can pay off fast than your big ol car loan.
Stay focused, avoid financial traps, and commit to never financing a car again. You’ve got this!