How to get out upside down car loan?

I made the mistake of financing a high apr auto loan with navy federal . First time financing and didn’t research was in a rush to get a car after coming back from overseas so my dumbass accepted 15.89 apr rate and my car is 11,800 . It’s been 6 months of making payments on it not missing any and car balance still around same price . Can’t afford to go higher on my payments . Worst part is my car is worth less than I owe can’t sell . Any advice on how to get out ? Don’t need disrespectful remarks I know i was dumb to do this


The only thing to do is make extra on the payments to pay off the loan. If this means a second job that can be dedicated to the loan payments, then do it.


As everyone has mentioned... there's no magic way out of negative equity. Pay as much extra as you can for two years or so, cut back on expenses, etc.


On a typical auto loan, in each monthly payment the largest portion goes toward interest and very little goes toward the principle. As time goes on, that reverses and most of your payment is applied to principle and very little toward interest. That's 100% normal. It's also normal to owe more than the vehicle is worth, unless you gave them a large down payment. Six months of payments isn't very long and you need to just calm down and make those payments. 16% interest is high, but that is probably due to your credit history, which I am guessing isn't very robust.


The best thing you can do is make higher car payments then the required payment. Other than that, just keep paying and plan on driving the car for several years. I was like that years ago and took me several years to get out of the problem. Good luck.


There's really only one answer -- keep paying until you are no longer upside down. Pay extra if you can. Then refinance at a lower interest rate, if possible.


You continue to PAY your monthly payments until you have completely paid off the loan. THEN the car will be yours, free and clear, and you can do whatever you want with it.


Easy, you cough up the amount you are upside down in cash then sell the car. If you cannot afford that, you need to work on your INCOME, get a 2nd job. Without paying extra every month, you are at least 15-18 months away from no longer being upside down. (That assumes no car problems which cannot be assumed because subprime cars generally have high miles) An extra 10-15 hours a week or a 2nd job with every dime going to the car loan will help a lot. But there is no magic answer.

Brilliant "Skippy" Answer

You can get refinance with another loan at a lower rate and pay off the first loan. So suppose your bank, or mortgage co with a hoime equity line of credit, or credit union etc, will give you a loan at 5%. Take that money and pay off the 15% loan, now you payments and interest are much lower. In the meantime, it doesn't matter whether your upside down or not in a loan until you sell or trade it in. Its like owning a stock in the stock market, and if you plan on keeping the car for a long period, eventuallly it will be right side up, and you're driving without a loan, drop your gap, comp and collision insurance.

Obi Wan Knievel

No, there's no magical way out. You can always stiff them on the payments until they repossess the vehicle, but that's not a very good way out. It's especially not-good if you intend to get another vehicle, because it doesn't sound like you have tens of thousands just sitting in a vault somewhere. You can probably get a refinance loan, but that process isn't cheap. Any money you save on lower interest will probably be eaten up in various fees, because there are fees for cancelling a contract early. And forget trying to fake your own death, because they know that trick.


The interest money comes out of the loan first so that's why the value didn't change. Keep making the payments and double up when possible to cut the length short. This is a LIFE LESSON you will never forget!


It is normal for the balance to decrease slowly - that is just what amortization does. You have been making payments reliably, which may be enough to get you a break on refinancing it. That is a spectacularly high interest rate that leaves you a lot of room for improvement. Ask around, and don't miss a payment or that opportunity goes away.

John Alden

Try to find another loan for a lot less of an interest rate.

Ninefinger's Leaky GayAnus