It's a fact - if given the opportunity to significantly lower your monthly car payment, rebuild your credit and save money, we'd all leap at the opportunity immediately. Buying a car can put you in a situation where you're struggling to make the loan payments and the rates are far too high for your current income levels.
Losing Control of Your Car Payments
It might be that you recently lost your job, bought a car far out of your budget or you got into an auto loan that you simply can't pay nor afford anymore. It's important in this situation to know what to do and how to approach the stressful financial situation you're currently in. The quicker you strike and nub the issue can help you avoid missing payments or having your automobile repossessed!
Talk to Your Lender
If you're on the cusp of missing a payment, it's in good practice to contact your auto lender as soon as possible. Communication in this situation is vital! Most lenders will want to continue to work with you, especially if you're a true and loyal customer. Sympathy can help, and informing your lender on what's happening can greatly increase your chances of the lender doing what they can to alleviate your current scenario.
Positive Equity
Owing less than the value of the car means you have positive equity. This translates to more options - like downsizing or refinancing; both of which can significantly give you lower car payments and interest rates all around. Owing more than what your car is worth means you have negative equity. This makes it harder to get out of a non-affordable auto loan.
Refinancing a Car
Refinancing an auto loan can significantly lower your car payments and probably one of the easiest and most popular options.
There's a chance you might be able to secure a lower APR (annual percentage rate) by refinancing your current auto loan with another lender. Your credit score might have strengthened and market interest rates might have gotten better - and it's entirely possible you didn't get a great deal at the time.
Another simple way refinancing assists is by spreading the loan amount over a longer period - reducing what you're needing to pay each month. Depending on the APR, you might pay more in interest by the end of the loan. Read more about car finance from https://en.wikipedia.org/wiki/Car_finance.
