You’ve got a car loan, and you are paying it off. So what’s the problem? If you are like most people, your car loan payments are taking up a lot of room in your budget. In fact, they might be blowing it up. The good news is that there are ways to handle this problem. Here they are.
Trade in Your Car
One of the best ways to get a lower interest rate on everyone approved car loans Calgary is to trade in your current vehicle and get a new one. The amount you owe on the old loan will be transferred to the new one, meaning you will have an extra chunk of cash sitting around. This can be used either as a down payment on the new car or as extra cash for bills or other expenses.
The main drawback is that this option requires trading in an older model for something newer, which means higher monthly payments until you make up for those initial costs through savings elsewhere.
Adjust Your Car Loan
Adjusting your car loan is a great way to save money. You can lower the interest rate, extend the loan term, or both. If you are a good customer with a solid credit score and a history of making timely payments, many lenders will want to offer you a better deal than what they originally offered.
If adjusting doesn’t do enough for you and paying off your loan early is still something that interests you, then consider refinancing with another lender who might offer more favorable terms than what currently exists in their system (e.g. no prepayment penalties).
Consider Loan Assumption
This is where one person buys your car and then takes over payments as if they were buying it themselves. The process is pretty simple.
Find someone who wants a used car and has good credit (or can get it), and ensure they understand they are taking over your payments. Ensure you get everything in writing so there are no misunderstandings later on down the road.
Re-balance Your Budget
It’s important to track your spending and see where all of your money goes so that you know where to cut back on unnecessary expenses. This way, when it comes time for the end-of-month crunch, you will have more cash in the bank than if you hadn’t been tracking all along.
It also helps immensely with debt repayment. You can set up automatic payments from each paycheck toward whatever loan or credit card has been causing problems to pay down that debt quicker than ever before. And once one loan is paid off, move on to another until they are all gone.
Takeaway
If you are worried about your car dealerships low creditand its impact on your budget, the first thing to do is talk to your lender. They may be able to help with refinancing options or other ways to reduce payments. If you can’t afford what you owe on your car loan, it’s time for tough decisions about whether or not that vehicle is worth keeping.
